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Premium Paper Corporation has a division that manufactures recipe cards. Since more and more people are storing their recipes electronically, Premium Paper is considering
Premium Paper Corporation has a division that manufactures recipe cards. Since more and more people are storing their recipes electronically, Premium Paper is considering whether they should eliminate the Recipe Cards Division. The division has an annual contribution margin of $38,000 and has $76,000 in fixed costs per year. $19,000 of the Recipe Cards Division's fixed costs cannot be avoided. If Premium Paper eliminates the Recipe Cards Division, what financial advantage (or disadvantage) would the company recognize per year? Multiple Choice $19,000 ($19,000) ($38,000) $38,000
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