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Macaulay Roller Skates has three product lines—D, E, and F. The following information is available: D E F Sales revenue $70,000 $60,000 $31,000 Variable costs (30,000) (10,000) (12,000) Contribution margin $40,000 $50,000 $19,000 Fixed costs (15,000) (10,000) (24,000) Operating income (loss) $25,000 $40,000 $(5,000) The company is deciding whether to drop product line F because it has an operating loss. Assuming fixed costs are unavoidable, if Macaulay drops product line F and does not replace it, what effect will this have on operating income?
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Macaulay Roller Skates has three product lines—D, E, and F. The following information is available:...
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