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  • 10-03-2022
  • Business
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If $25,000 of fixed costs will be eliminated by discontinuing the Sporty line, how will operating income be affected

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topeadeniran2 topeadeniran2
  • 22-03-2022

When $25,000 of fixed costs will be eliminated by discontinuing, the operating income will increase by $5000.

How to calculate the operating income?

From the complete information given, the impact on operating income will be calculated thus:

= Savings fixed cost - Loss on contribution margin

= $25000 - $20000

= $5000

Therefore, the operating income will increase by $5000.

Learn more fixed cost on:

https://brainly.com/question/3636923

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