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A firm is considering dropping the product line ZZ. ZZ currently shows a loss of $100,000. The contribution margin for the product line is $120,000.

A firm is considering dropping the product line "ZZ". ZZ currently shows a loss of $100,000. The contribution margin for the product line is $120,000. Total fixed expenses are $220,000 of which 90,000 is unavoidable and $130,000 is avoidable.

How much better off or worse off will the firm be if they keep product ZZ?

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