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Maizy Productions has three models: D, E, and F. The following information is available: Model D Model E Model F Sales revenue Variable expenses Contribution
Maizy Productions has three models: D, E, and F. The following information is available: Model D Model E Model F Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) $69,000 $33,000 $24,000 $32,000 $13,000 $14,000 $37,000 $20,000 $10,000 $16,000 $16,000 $16.000 $21,000 $4,000 $(6,000) Maizy Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed costs are unavoidable. Malzy Productions discontinues model F and rents the space formerly used to produce product F for $16,000 per year, what effect will this have on operating income? A. Decrease $25,000 B. Increase $25,000 C. Decrease $6,000 D. Increase $6,000
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