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Dunder Ltd. has two product lines, H and G. The following information is available: H G Sales $8816 $15438 Variable costs 4963 8117 Contribution margin
Dunder Ltd. has two product lines, H and G. The following information is available:
| H | G | |
Sales | $8816 | $15438 | |
Variable costs | 4963 | 8117 | |
Contribution margin | 3853 | 7321 | |
Fixed costs: |
|
| |
| Avoidable | 2148 | 2800 |
| Unavoidable | 1913 | 2000 |
Operating Income | $-208 | $2521 |
Dunder Ltd. is considering discontinuing product line H. This would increase sales of product line G by 42% without increasing fixed costs. If the company does decide to discontinue product line H, operating income will increase (decrease) by:
Select one:
a. $-778
b. $4779
c. $1370
d. $-2691
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