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Pirate Company's management is considering dropping its small television product line due to continued operating losses. Pirate has forecasted an operating loss of $25,000 for

Pirate Company's management is considering dropping its small television product line due to continued operating losses. Pirate has forecasted an operating loss of $25,000 for the upcoming year. Fixed expenses for the upcoming year are forecasted at $45,000, of which $30,000 is considered to be avoidable. Should Pirate Company drop the small television product line?

A. Yes, because the avoidable fixed costs exceed the contribution margin that would be lost

B. Yes, because of the forecasted operating loss of $25,000

C. No, because the unavoidable fixed xosts are less than the forecasted operating loss

D. No, because the contribution margin that would lost exceeds the $45,000 of fixed costs

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