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ti13 Bailey Corporation manufactures and sells a number of products, including Product G. Results for last year for the manufacture and sale of Product G
ti13 Bailey Corporation manufactures and sells a number of products, including Product G. Results for last year for the manufacture and sale of Product G are as folla 2 points $750,000 HSS expenses: able production costs $450,000 s commissions 110,000 Salary of product manager 95,000 xed product advertising 80.000 exed manufacturing overhead 70,000 805,000 Net operating loss ($55,000 Bailey is trying to decide whether or not to discontinue the manufacture and sale of Product G. All expenses other than fixed manufacturing overhead are avoidable dropped. None of the fixed manufacturing overhead is avoidable. Assume that dropping Product G would result in a $40,000 increase in the contribution margin of other product lines. If Bailey chooses to drop Product G, then the operating income next year due to this action will be a: $25,000 increase $95,000 decrease $65,000 decrease $66,000 increase $95,000 increase $65,000 increase $25,000 decrease ly
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