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    Discontinuance

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    Vanilli Company plans to discontinue a division that generates a total contribution margin of $20,000 per year. Fixed overhead associated with this division is $50,000, of which $5,000 cannot be eliminated. The effect of this discontinuance on Vanilli's operating income would be an increase of $______?

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    https://brainmass.com/business/accounting/discontinuance-vanilli-company-169190

    Solution Summary

    The solution determines the effect of discontinuance on Vanilli's operating income.

    $2.49

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