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SusEnergy has two power generator lines: Solar and Gas generators. Income statement data for the most recent year follow: Total Solar Gas Sales revenue $480,000
SusEnergy has two power generator lines: Solar and Gas generators. Income statement data for the most recent year follow: Total Solar Gas Sales revenue $480,000 $340,000 $140,000 Variable expenses 385,000 265,000 120,000 Contribution margin 95,000 75,000 20,000 Fixed expenses 81,000 40,500 40,500 Operating income (loss) $14.000 $34,500 $(20,500) Assuming the Gas line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $28,000 per year, how will operating income be affected? A. Increase $36,000 B. Decrease $8,000 C. Increase $8,000 D. Increase $22,000
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