Question: Abba, Inc. is considering dropping a product line. During the prior year, the line had sales of $ 2 0 7 , 0 0 0
Abba, Inc. is considering dropping a product line. During the prior year, the line had sales of $ and a contribution margin of Fixed expenses consist of:Salaries$RentAdvertisingAdministrativeTotal fixed expenses$The product line manager's $ salary is avoidable as is the $ of advertising. Of the administrative expenses, $ is avoidable. The rest are general allocated expenses that will not change if the product is dropped. The rent expense is allocated to product lines based on sales and represents a share of the total cost for the building. If this product line is dropped, overall net operating income will
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