Hayden Manufacturing has three product lines. Its only unprofitable product line is Product 22 which generates sales of $700,000 per year. The annual costs associated with Product 22 are $460,000 in variable expenses and $300,000 in fixed expenses. If Hayden eliminates the Product 22 line, 30% of the fixed expenses can be eliminated. What are the relevant costs that should be analyzed by Hayden’s managers in making this decision?

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