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The income statement for Germain Appliances is divided by its two product lines, Toasters and Microwaves, as follows: Sales revenue Variable expenses Contribution margin Fixed
The income statement for Germain Appliances is divided by its two product lines, Toasters and Microwaves, as follows: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Toaster $620,000 $460,000 $160,000 $75,000 $85,000 Microwave $255,000 $210,000 $45,000 $75,000 $(30,000) Total $875,000 $670,000 $205,000 $150,000 $55,000 If fixed costs remain unchanged and Germain Appliances discontinues the Microwave line, how will operating income change? O A. Will decrease by $150,000 OB. Will increase by $150,000 O C. Will increase by $45,000 OD. Will decrease by $45,000
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