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The managers of Courtney Cabinets are considering dropping one of their product lines. The product line typically has the following revenue and costs: Sales $120,000

The managers of Courtney Cabinets are considering dropping one of their product lines. The product line typically has the following revenue and costs: Sales $120,000 Variable costs 90,000 Contribution margin 30,000 Fixed costs 35,000 Operating loss $ (5,000) If the product line is discontinued, $4,000 of the fixed costs would be avoided. Also, the freed-up capacity would generate $6,000 of additional contribution margin from the expansion of other product lines. If Courtney discontinues the product line, the effect on overall income will be A. $20,000 decrease B. $9,000 increase C. $10,000 decrease D. $12,000 decrease

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