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HiTech Wants to Drop the Regular Product Line

Question 42

Multiple Choice

HiTech wants to drop the Regular product line.If the line is dropped,company-wide fixed manufacturing costs would fall by 10% because there is no alternative use of the facilities.What would be the impact on operating income if Regular is discontinued?


A) $0.
B) $10,400 increase.
C) $20,000 increase.
D) $39,600 decrease.
E) None of thesE.

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