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Green, Inc has three products, X, Y, and Z. The following information is available: Product X Product Y Product Z Sales $70,000 $97,000 $23,000 Variable
Green, Inc has three products, X, Y, and Z. The following information is available: Product X Product Y Product Z Sales $70,000 $97,000 $23,000 Variable costs 37,000 51,000 15,000 Contribution margin 33,000 46,000 8,000 Fixed costs: Avoidable 10,000 20,000 2,000 Unavoidable 7,000 12,000 9,400 Operating income $16,000 $14,000 $ (3,400) Green Company is thinking of dropping Product Z because it is reporting a loss. Assuming Green drops Product Z and does NOT replace it, operating income will ________. increase by $2,000 decrease by $11,400 decrease by $6,000 increase by $3,400
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