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Ulmer Company has three product lines, X, Y, and Z. The following information is available: Y Z Sales Variable costs $20,000 1,200 $30,000 16,000

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Ulmer Company has three product lines, X, Y, and Z. The following information is available: Y Z Sales Variable costs $20,000 1,200 $30,000 16,000 $8,000 5,000 Contribution margin $ 8,000 $14,000 $ 3,000 Fixed costs: Avoidable 3,000 Fixed costs: Unavoidable 2,000 Operating income $ 3,000 6,000 3,000 $ 5,000 2,000 1,800 $( 800) Ulmer Company is thinking of dropping product line Z since it is losing money. Assuming Ulmer drops line Z and does NOT replace it, the operating income will

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