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Cookbook Travel Book Classics Sales $65,000 $100,000 $23,000 Variable costs 37,000 53,000 14,000 Contribution margin 28,000 47,000 9,000 Fixed costs: Avoidable 7,000 17,000 5,000 Unavoidable

Cookbook

Travel Book

Classics

Sales

$65,000

$100,000

$23,000

Variable costs

37,000

53,000

14,000

Contribution margin

28,000

47,000

9,000

Fixed costs:

Avoidable

7,000

17,000

5,000

Unavoidable

8,000

14,000

5,400

Operating income

$13,000

$16,000

$(1,400)

Giant Company is thinking of dropping Product C because it is reporting a loss. Assuming Giant drops Product C and does NOT replace it, operating income will________.

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