Sprockets Inc. eliminated a product that had total yearly sales of $$120,000,$ total yearly variable expenses of $$48,000,$ and total yearly fixed expenses of $$92,000.$ By dropping the product, Sprockets increased its company$-$wide yearly net income by $$10,800.$ These figures tell us that when Sprockets discontinued the product, it was also able to eliminate of the fixed costs associated with that product.

$66\%$

$90\%$

$10\%$

$34\%$