Shine Bright Company has three product lines: D, E, and F. The following information is available:
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Shine Bright Company is thinking of dropping product line F because it is reporting an operating loss. Assume that $15,000 of total fixed costs could be eliminated by dropping F. What effect would this decision have on operating income?
A) Operating income will increase $3,000.
B) Operating income will increase $1,000.
C) Operating income will decrease $6,000.
D) Operating income will decrease $3,000.
Correct Answer:
Verified
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