Percy Productions has three models: D, E, and F. The following information is available: Sales...
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Percy Productions has three models: D, E, and F. The following information is available: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Model D $67,000 $32,000 $35,000 $16,000 $19,000 Model E $35,000 $13,000 $22,000 $16,000 $6,000 Model F $24,000 $14,000 $10,000 $16,000 $(6,000) Percy Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed costs are unavoidable. Percy Productions discontinues model F and rents the space formerly used to produce product F for $18,000 per year, what effect will this have on operating income? O A. Decrease $27,000 OB. Decrease $8,000 OC. Increase $8,000 OD. Increase $27,000
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