Laurel Inc

Laurel Inc. has three product lines: A, B, and C. Management is considering dropping product line C. If it is discontinued, one-half of its fixed costs can be avoided. The discontinuation of product line C would:

A) decrease net income by $3,500.
B) increase net income by $1,000.
C) decrease net income by $12,500.
D) increase net income by $4,500.