Question: financial data for alphabet Inc is provided; there are two product lines; ABC & XYZ. Sales in total $78200, variable expenses in total $51000, contribution
financial data for alphabet Inc is provided; there are two product lines; ABC & XYZ. Sales in total $78200, variable expenses in total $51000, contribution margin in total $27200, fixed expenses in total $14500, net income in total $12700. For product line ABC; sales $33800, variable expenses $30600, contribution margin $3200, fixed expenses $10875, net income -$7675. For product line XYZ; sales $44400, variable expenses $20400, contribution margin $24000, fixed expenses $3625, net income $20375. The manager is considering dropping the ABC product line. Sales and variable expenses are traceable to the product lines. The analysis determined that $9000 of the fixed expenses would be elimated if the ABC product line is dropped. Calculate the financial effect of dropping the ABC product line
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