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HiTech manufactures two products: Regular and Super. The results of operations for 20x1 follow Regular Super Total Units 10,000 3,700 1 3,700 Sales $240,000 $740,000

HiTech manufactures two products: Regular and Super. The results of operations for 20x1 follow

Regular Super Total

Units 10,000 3,700 1 3,700

Sales $240,000 $740,000 $980,000

Less: COGS 180,000 481,000 661,000

Gross Margin $60,000 $259,000 $319,000

Less: Selling Expenses 60,000 134,000 194,000

Operating Income $0 $125,000 $125,000

Fixed manufacturing costs included in cost of goods sold amount to $3 per unit for Regular and $20 per unit for Super. Variable selling expenses are $4 per unit for Regular and $20 per unit for Super; remaining selling amounts are fixed.

Disregard the information in the previous question. If HiTech eliminates Regular and uses the available capacity to produce and sell an additional 1,500 units of Super, what would be the impact on operating income?

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