A company has three product lines, one of which reflects the following results: If this product line is eliminated, 60% of the fixed expenses can be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, the company's net income will
A) increase by $50,000.
B) decrease by $90,000.
C) decrease by $6,000.
D) increase by $6,000.

Question

A company has three product lines, one of which reflects the following results:  If this product line is eliminated, 60% of the fixed expenses can be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, the company's net income will
A) increase by $50,000. 
B) decrease by $90,000. 
C) decrease by $6,000. 
D) increase by $6,000.

Quizplus · Accepted Answer

The Answer of A company has three product lines, one of which reflects the following results:  If this product line is eliminated, 60% of the fixed expenses can be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, the company's net income will
A) increase by $50,000. 
B) decrease by $90,000. 
C) decrease by $6,000. 
D) increase by $6,000.

A Company Has Three Product Lines, One of Which Reflects