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Assume Serrano Company is deciding if it should discontinue one of its product lines. Assume below is the income statement from last year for its
Assume Serrano Company is deciding if it should discontinue one of its product lines. Assume below is the income statement from last year for its product line If the product line was dropped, Serrano Company could avoid $2,600,000 per year in fixed costs. The remainder of the fixed costs are not avoidable. The annual financial advantage (disadvantage) for the company discontinuing this product line would be: (Put a - sign in front of your number if it is a disadvantage. To get credit for the question your amount and direction must be correct.)
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