7. Impact of dropping a product line

7 Impact of dropping a product line LO3 Summer Ltd sells three outdoor chairs (unfinished, stained and painted) that use common facilities. The relevant data concerning these three products follow. Unfinished $ 20000 10000 $10000 Stained $ 60 000 40000 $ 20000 Painted $ 80000 50000 $ 30000 Total $160000 100 000 $ 60000 Sales Variable costs Contribution margin Fixed costs Operating loss 10000 $ 0 30000 $(10000) 60000 $(30000) 100000 $(40000) REQUIRED If $30 000 of the fixed costs allocated to the painted chairs are avoidable and the company drops painted chairs from its product line, what will be the impact on profit