Carrot Jewelry Is Considering Two Mutually Exclusive Product Lines, Either

Carrot Jewelry is considering two mutually exclusive product lines, either an emerald ring or a ruby bracelet, which will be introduced next year. The board of directors of the company has established a target net income of $30,000 for the new product line but wishes to maximize profit in any case. For the emerald ring line, Carrot expects to sell 200 rings during the year at a selling price per ring of $1,500. Estimated variable costs are $800 per ring, and fixed costs will amount to $90,000 for the year. For the ruby bracelet line, the company anticipates sales of 500 units at a selling price of $1,100 per bracelet. Fixed costs will amount to $110,000 for the year, and the variable costs will also be $800 each. Carrot Jewelry will have a tax rate of 30% next year. Which one of the following statements is correct?

A) Carrot should produce and sell rings even though this will result in a $5,000 shortfall in targeted net income.
B) Carrot should produce and sell bracelets, since the income from bracelets will exceed the income from rings and exceed the targeted net income by $20,000.
C) Carrot should produce and sell bracelets, since the bracelets will generate more net income than the rings and exceed targeted net income by $5,000.
D) Carrot should produce and sell rings, since rings will generate more net income than bracelets and will exceed targeted net income by $5,000.