9 10 11 Testion 3 [CLO-5] Bailey Corporation manufactures and sells a number o Sales $750,00 Less expenses: Variable production costs $450,000 Sales commissions 110,000 Salary of product manager 95,000 Fixed product advertising 80,000 Fixed manufacturing overhead 70,000 805,000 Net operating loss ($55,000 Bailey is trying to decide whether or not to discontinue the mar dropped. None of the fixed manufacturing overhead is avoidab Assume that dropping Product G would result in a $40,000 incre income next year due to this action will be a: $95,000 decrease $25,000 decrease $25,000 increase $95,000 increase $65,000 increase 25,000 30,000 70,000 805,000 ($55,000 discontinue the manufacture and sale of Product G. All expenses other tha overhead is avoidable. ult in a $40,000 increase in the contribution margin of other product lines. 1: expenses other than fixed manufacturing overhead are avoidable if the product is her product lines. If Bailey chooses to drop Product G, then the change in net operating