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Rings Company has three product lines, A. B. and C. The following financial information is available: Product Line A $ 36,000 $ 21,600 $ 14,400
Rings Company has three product lines, A. B. and C. The following financial information is available: Product Line A $ 36,000 $ 21,600 $ 14,400 Product Line B $ 60,000 $ 32,000 $ 28,000 Product Line C $ 15,000 $ 9,375 $ 5,625 Item Sales Variable costs Contribution margin Fixed costs: Avoidable Unavoidable Pre-tax operating income $ 4,600 $ 3,300 $ 6,500 $ 10,500 $ 6,000 $ 11,500 $ 3,900 $ 2,300 $ (575) If Product Line C is discontinued and the manufacturing space formerly devoted to this line is rented for $6.000 per year, pre-tax operating income for the company will likely: Multiple Choice Be unchanged-the two effects cancel each other out. Increase by $3.075 Increase by $4,275. Increase by $6.975. Increase by some other amount
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