Question
Karlson Roller Skates has three product linesD, E, and F. The following information is available: D E F Sales revenue $90,000 $40,000 $30,000 Variable costs
Karlson Roller Skates has three product linesD, E, and F. The following information is available: D E F Sales revenue $90,000 $40,000 $30,000 Variable costs (30,000) (10,000) (12,000) Contribution margin $60,000 $30,000 $18,000 Fixed costs (10,000) (15,000) (23,000) Operating income (loss) $50,000 $15,000 $(5,000) The company is deciding whether to drop product line F because it has an operating loss. Assuming fixed costs are unavoidable, if Karlson drops product line F and rents the space formerly used to produce product F for $18,000 per year, total operating income will be ____.
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