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Kahn Company produces and sells 8,000 units of Product Zebra each year. Each unit of Product Zebra sells for $10 and has a contribution margin
Kahn Company produces and sells 8,000 units of Product Zebra each year. Each unit of Product Zebra sells for $10 and has a contribution margin of $6. Kahn is considering dropping Product Zebra and wants to know what the effect will be on operating income. It is estimated that if Product Zebra is discontinued, $50,000 of the $60,000 in fixed costs charged to Product Zebra could be eliminated. These data indicate that if Product Zebra is discontinued, overall company operating income should: |
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