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Waterway Machines has four product lines, one of which reflects the following results: Sales $210000 Variable costs 115000 Contribution margin 95000 Fixed costs Net
Waterway Machines has four product lines, one of which reflects the following results: Sales $210000 Variable costs 115000 Contribution margin 95000 Fixed costs Net loss 115000 $(20000) If this product line is eliminated, 40% of the fixed costs can be eliminated and the other 60% will be allocated to other product lines. If management decides to eliminate this product line, what will happen to the company's net income? It will increase by $20000. O It will increase by $46000. It will decrease by $49000. O It will decrease by $29000.
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