The Tangier Company is considering eliminating the following product line: Product AXPSales$80,000 Less variable costs: Raw materials 50,000 Direct labor 10,000 Contribution margin$20,000 Less fixed costs: Production costs allocated to products 30,000 Profit (Loss)$(10,000) What amount of cost is avoidable if Tangier outsources production of this product?
A. $90,000
B. $60,000
C. $20,000
D. $50,000
Answer: B
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