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Dmar Industries manufactures two products: Regular and Super. The results of operations for 20x1 follow. Regular Total Super Units 15,000 4,000 19,000 Sales revenue $420,000
Dmar Industries manufactures two products: Regular and Super. The results of operations for 20x1 follow. Regular Total Super Units 15,000 4,000 19,000 Sales revenue $420,000 $760,000 $1,180,000 Less: Cost of goods sold 750,000 330,000 420,000 90,000 $340,000 Gross Margin Less: Selling expenses 430,000 210,000 300,000 90,000 Operating income (loss) $ 130,000 $130,000 Fixed manufacturing costs included in cost of goods sold amount to $2 per unit for Regular and $30 per unit for Super. Variable selling per u per uni r Regular Super, remaining selling an expenses are Omar Industries wants to drop the Regular product line. If the line is dropped, company-wide fixed manufacturing costs would fall by 20% ecause there is no alternative use of the facilities. What would be the impact on operating income if Regular is discontinued
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