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Blowing Sand Company produces the Drafty model fan, which currently has a net loss of $59,000 as follows: Drafty Model Sales revenue Less: Variable
Blowing Sand Company produces the Drafty model fan, which currently has a net loss of $59,000 as follows: Drafty Model Sales revenue Less: Variable costs Contribution margin Less: Direct fixed costs Segment margin Less: Common fixed costs Net operating income (loss) $ 240,000 168,000 $ 72,000 59,000 $ 13,000 72,000 $ (59,000) Eliminating the Drafty product line would eliminate $59,000 of direct fixed costs. The $72,000 of common fixed costs would be redistributed to Blowing Sand's remaining product lines. Required: Will Blowing Sand's net operating income increase or decrease if the Drafty model is eliminated? By how much? Total profit by
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