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DM Corporation has provided you with the following budgeted income statement for one of its products: Sales revenue $700,000 Variable costs (430,000) Contribution margin $270,000

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DM Corporation has provided you with the following budgeted income statement for one of its products: Sales revenue $700,000 Variable costs (430,000) Contribution margin $270,000 Fixed costs (320,000) Operating loss $150,000) DM has just encountered environmental problems with the product and will be forced to drop the product line altogether. DM will be able to eliminate 90% of the fixed costs. What will be the impact on operating income of the company? Select one: A. Operating income will increase by $46,000. B. Operating income will increase by $224,000. C. Operating income will decrease by $224,000. D. Operating income will decrease by $46,000. E. None of the above

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