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All About Animals has two product lines: cat food and dog food. Contribution margin income statement data for the most recent year follow All About
All About Animals has two product lines: cat food and dog food. Contribution margin income statement data for the most recent year follow
All About Animals has two product lines: cat food and dog food. Contribution margin income statement data for the most recent year follow: Total Cat Food Dog Food Sales revenue $425,000 $340,000 $85,000 Variable expenses $40,000 $62,000 $22,000 Contribution margin $363,000 $318,000 $45,000 Fixed expenses $99,000 $47,000 $52,000 Operating income (loss) $264,000 $271,000 $(7,000) If $12,000 of fixed costs will be eliminated by discontinuing the dog food line, how will operating income be affected? Increase $231,000 Decrease $54,000 Decrease $33,000 Increase $495,000Step by Step Solution
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