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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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