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possible Sole Sisters Company has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: Sales revenue Variable
possible Sole Sisters Company has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $490,000 Hiking $350,000 Fashion $140,000 395,000 275,000 120,000 95,000 75,000 20,000 80,000 $15,000 40,000 $35,000 40,000 $(20,000) If $25,000 of fixed costs will be eliminated by discontinuing the Fashion line, how will operating income be affected? Show your work, calculate the amount, and state whether this is an increase or decrease
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