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Cecil Company presently has three product lines: papers, stamps, and computer ribbons. The company is profitable overall but is considering discontinuing the stamp line because

Cecil Company presently has three product lines: papers, stamps, and computer ribbons. The company is profitable overall but is considering discontinuing the stamp line because of losses from that line. Current data on the stamp line is as follows:

Sales revenue $27,000
Variable costs 19,000
Direct Avoidable Fixed Costs 5,000
Indirect allocated fixed costs 6,000
Net Income (Loss) on Stamp Line ($3,000)

Given this information, if Cecil discontinues the stamp line, overall net income for the company would

increase by $3,000.

decrease by $3,000.

decrease by $6,000.

decrease by $8,000.

none of the above.

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