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Azuki Corporation operates in two sales territories, Urban and Rural. Data concerning last years operations appear below: Urban Rural Sales $ 320,000 $ 80,000 Variable
Azuki Corporation operates in two sales territories, Urban and Rural. Data concerning last years operations appear below:
Urban | Rural | ||||||
Sales | $ | 320,000 | $ | 80,000 | |||
Variable expenses | 208,000 | 56,000 | |||||
Contribution margin | 112,000 | 24,000 | |||||
Traceable fixed expenses | 48,000 | 30,000 | |||||
Segment margin | $ | 64,000 | $ | (6,000 | ) | ||
Azuki's common fixed expenses were $25,000 last year.
If operations in the Rural Sales Territory would have been discontinued at the beginning of last year, how would this have changed the net operating income of Azuki Corporation as a whole?
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