Reference no: EM132648725
Bubblemania has three product lines - A, B, and C.A B C TotalSales $10,000
Variable costs Contribution Margin Fixed costs
Net income
9,000 12,000
7,000 6,000
2,000 6,000
6,000 3,000
31,000
17,500
13,500
12,500
1,000
4,500
5,500
3,500
2,000 (4,000) 3,000
Question 1: Product line B appears unprofitable, and management is considering discontinuing the line. How would the discontinuation of Product line B affect net income?
a. increase by $4,000
b. decrease by $4,000
c. increase by $2,000
d. decrease by $2,000
e. increase by $6,000