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Mitzy was evaluating the profitability of her five different product lines. Product Line W showed segment margin of $8,000 (all of its traceable costs are
Mitzy was evaluating the profitability of her five different product lines. Product Line W showed segment margin of $8,000 (all of its traceable costs are avoidable). After allocating all of the company's common fixed costs to each of the five lines, she found that Product Line W was generating a loss of $5,000. This same product line had been showing a similar loss for the last several years, based on a comparable analysis of profitability after all company costs had been allocated to the product lines. Mitzy was ready to improve her company's profability and drop that product line. Which of the following statements is correct? Multiple Choice O Dropping Product Line W will reduce the company's profitability by $5,000. Dropping Product Line W will improve the company's profitability by $8,000. O Dropping Product Line W wil improve the company's profitability by $5,000. Dropping Product Line W will reduce the company's profitability by $8,000
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