Question: Motion Rollerblades has three product lineslong dash D , E , and F . The following information is available: D E F Sales revenue $

Motion Rollerblades has three product
lineslong dashD,
E, and F. The following information is available:
D
E
F
Sales revenue
$70,000
$40,000
$30,000
Variable costs
(30,000)
(5,000)
(12,000)
Contribution margin
$40,000
$35,000
$18,000
Fixed costs
(10,000)
(15,000)
(23,000)
Operating income(loss)
$30,000
$20,000
$(5,000)
The company is deciding whether to drop product line F because it has an operating loss. Assuming fixed costs are unavoidable, if Motion drops product line F and does not replace it, what effect will this have on operating income?

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