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Pepper's Automotive produces auto parts for various automotive retailers. Pepper's is evaluating the exhaust system damson of the company and has come up with the
Pepper's Automotive produces auto parts for various automotive retailers. Pepper's is evaluating the exhaust system damson of the company and has come up with the following data for the year net revenues are $1, 480,000. variable costs are $524,000, and fixed costs are $608,000. Of the fixed costs, controllable fixed costs are $132,000 and non controllable fixed costs are $476,000 Pepper's Automotive has further analyzed the exhaust division into three products: exhaust pipes, intake valves, and intake pipes. The income statement is available below. What is the change in profit in both the short run and long run by dropping intake valves from its product line
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