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5. (15 points) Macaulay Roller Skates Company has three product lines: D, E, and F. The following information is available: D Sales Variable costs Contribution
5. (15 points) Macaulay Roller Skates Company has three product lines: D, E, and F. The following information is available: D Sales Variable costs Contribution margin Fixed expenses Operating income (loss) $70,000 (40,000) 30,000 (15,000) $15,000 $40,000 (20,000) 20,000 (15,000) $5,000 $30,000 (25,000) 5,000 (25.000) ($20,000) a. The company is thinking of dropping product line F because it is reporting an operating loss. Assume that $15,000 of total fixed costs could be eliminated by dropping F. Should product line F be dropped? You must demonstrate that Macaulay is better off with your decision
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