Question: A study has been conducted to determine if Product A should be dropped. Sales of the product total $200,000 per year; variable expenses total $140,000
A study has been conducted to determine if Product A should be dropped. Sales of the product total $200,000 per year; variable expenses total $140,000 per year. Fixed expenses charged to the product total $90,000 per year. The company estimates that $40,000 of these fixed expenses will continue even if the product is dropped These data indicate that if Product A is dropped, the company's overall net operating income would: A. decrease by $20,000 per year B. increase by $20,000 per year C. decrease by $10,000 per year D. increase by $30,000 per year Net operating income would decline by $10,000 if Product A were dropped
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