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arget Corporation has two product lines, Air Fryers and Instant Pots, as follows: Air Fryer Instant Pot Total Sales revenue $620,000 $255,000 $875,000 Variable expenses
arget Corporation has two product lines, Air Fryers and Instant Pots, as follows:
Air Fryer | Instant Pot | Total | |
Sales revenue | $620,000 | $255,000 | $875,000 |
Variable expenses | $440,000 | $210,000 | $650,000 |
Contribution margin | $180,000 | $45,000 | $225,000 |
Fixed expenses | $75,000 | $75,000 | $150,000 |
Operating income (loss) | $105,000 | $(30,000) | $75,000 |
If Target Corporation can eliminate fixed costs of $34,000 and increase the sale of Air Fryers by 6300 units at a selling price of $30 per unit and a contribution margin of $12 per unit, then discontinuing the Instant Pots should result in which of the following?
Group of answer choices
Decrease in total operating income of $30,600
Increase in total operating income of $30,600
Increase in total operating income of $64,600
Decrease in total operating income of $64,600
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