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Indigo Corporation manufactures several types of accessories. For the year, the gloves and mittens line had sales of $499,000, variable costs of $371,000, and fixed
Indigo Corporation manufactures several types of accessories. For the year, the gloves and mittens line had sales of $499,000, variable costs of $371,000, and fixed costs of $146,000. Therefore, the gloves and mittens line had a net loss of $18,000. If Indigo eliminates the line, $41,400 of fixed costs will remain. Prepare an analysis showing whether the company should eliminate the gloves and mittens line. (If an amount reduces the net income then enter with a negative sign preceding the number e.g. 15,000 or parenthesis, e.g. (15,000)
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