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Question 7 (4 points) Alpha Company sells books, videos, and music. It's current results are presented below: Books Music Videos Total Units sold 1,000 2,000

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Question 7 (4 points) Alpha Company sells books, videos, and music. It's current results are presented below: Books Music Videos Total Units sold 1,000 2,000 2,000 5,000 Revenue $22.000 $40,000 $23,000 $85,000 Variable departmental costs 17,000 22.000 12,000 51,000 Direct fixed costs 1,000 3,000 2.000 6,000 Allocated fixed costs 7.000 7.000 21,000 Net income (loss) $ (3,000 $ 8,000 $ 2.000 $ 7.000 7.000 Allocated fixed costs are unavoidable (if one product line is eliminated; the costs will be allocated to the other lines). Direct fixed costs are associated only with an individual product line and would be eliminated if the associated line is eliminated What would the company's net income have been if it had discontinued book sales? (Remember to show HOW you got your answer)

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