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Maizy Productions has three models: D, E, and F. The following information is available: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income
Maizy Productions has three models: D, E, and F. The following information is available: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Model D $69,000 $37,000 Model E $37,000 $14,000 Model F $24,000 $14,000 TU $32,000 $20,000 $12,000 $23,000 $20,000 $3,000 $10,000 $20,000 ($10,000) Maizy Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed costs are unavoidable. Assuming Maizy Productions discontinues Ine F and is able to double the production and sales of model E without increasing foxed costs. What effect will this have on operating income? A. Increase $13,000 B. Decrease $13,000 OC. Increase $18,000 OD. Decrease $18,000
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