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Topic
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Someone please explain how this answer is B.
The following information is available on Crain Co.’s two product lines:
Chairs Tables
Sales $180,000 $ 48,000
Variable costs (96,000) (30,000)
Contribution margin
$ 84,000 $ 18,000
Fixed costs:
Avoidable (36,000) (12,000)
Unavoidable (18,000) (10,800)
Operating income
(loss) $ 30,000 $ (4,800)
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Assuming that the table line is discontinued, and the factory space previously used to make tables is rented for $24,000 per year, operating income will increase by what amount?
A.$13,200
B.$18,000
C.$24,000
D.$28,800
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