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A study has been conducted to determine if one of the product lines of Saugatuck Company should be discontinued. This product line generates a contribution
A study has been conducted to determine if one of the product lines of Saugatuck Company should be discontinued. This product line generates a contribution margin of $300,000 per year. Fixed expenses allocated to the product line are $390,000 per year. It is estimated that $240,000 of these fixed expenses could be eliminated if the product line is discontinued. What is the impact on the company's overall net operating income if the product line is discontinued? A) Decrease of $60,000 per year B) Increase of $60,000 per year C) Decrease of $150,000 per year D) Increase of $150,000 per year
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