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A company is considering discontinuing a product line that generates annual revenue of $300,000 and incurs variable costs of $180,000. The fixed costs associated with
A company is considering discontinuing a product line that generates annual revenue of $300,000 and incurs variable costs of $180,000. The fixed costs associated with the product line are $70,000. If the product line is discontinued, the company can use the freed-up production capacity to generate additional revenue of $120,000. Determine whether the company should discontinue the product line based on relevant costs.
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