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Total Problem 4 (5) Color Corporation has the following operating income report for its two products. Magenta Ochre Sales $3,000 $1,000 $4,000 Variable costs 900

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Total Problem 4 (5) Color Corporation has the following operating income report for its two products. Magenta Ochre Sales $3,000 $1,000 $4,000 Variable costs 900 500 1.400 Contribution margin 2,100 500 2,600 Fixed costs 1.400 2,200 Operating income 700 (300) 400 Fixed costs consist of corporate headquarters overhead of $1,000 (allocated according to proportion of sales) and product-line-specific discretionary items that is, costs associated with resources that could be eliminated if the product line did not exist). Assume there are intangible benefits associated with Product Ochre (say, some effect on our company's reputation). What is the minimum annual value of these benefits that would lead Color Corporation to choose to keep Product Ochre rather than eliminate it? 800

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