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Our company manufactures and sells seven different products to different markets. Financial data for product x2 is as follows: revenue, $45,000; variable expenses, $35,000; and
Our company manufactures and sells seven different products to different markets. Financial data for product x2 is as follows: revenue, $45,000; variable expenses, $35,000; and fixed expenses $15,000. Assume that fixed costs will remain unchanged if the product line is dropped, and there will be no adverse effect on sales of other products. What is the effect of dropping this product on the operating income of the company?
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