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Valber Company is considering eliminating its Phone division. The company allocates fixed costs based on sales. If the Phone division is dropped, all of its

Valber Company is considering eliminating its Phone division. The company allocates fixed costs based on sales. If the Phone division is dropped, all of its variable costs are avoidable, and $155,000 of its fixed costs are avoidable. The impact on Valber's income from eliminating the Phone division is: Sales Variable costs Contribution margin Fixed costs Net income (loss) Multiple Choice $10,000 decrease Desktops $ 371,000 206,000 Laptops $ 886,500 640,000 Tablets $ 709,000 Phones $980,000 533,000 800,000 165,000 246,500 176,000 180,000 76,200 179,300 143,800 200,000 88,800 67,200 32,200 (20,000)

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