Prockets Inc. just eliminated a product that had yearly sales of $120,000, yearly variable expenses of $48,000, and yearly fixed expenses of $92,000. By dropping the product, Sprockets increased its company-wide yearly net income by $10,800. These data indicate that when Sprockets discontinued the product, it was also able to eliminate _____ of the fixed costs associated with that product.

Answer:Savings in fixed costs= 30,800Explanation:Giving the following information: Prockets Inc. just eliminated a product that had yearly sales of $120,000, yearly variable expenses of $48,000, and yearly fixed expenses of $92,000. By dropping the product, Sprockets increased its company-wide yearly net income by $10,800. Loss= 120,000 - 48,000 - 92,000= -20,000By dropping the product:Savings in fixed costs= 20,000 + 10,800= 30,800