Solution-What is amount of change in net income for the

What is amount of change in net income for the current year

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Reference no: EM132830366

Question - Below is the condensed income statement for Jay Tools for the past year:

Product	T1	T2
Sales	$340,000	$160,000
Costs:
Variable costs	$270,000	$110,000
Fixed costs	80,000	20,000
Total costs	$350,000	$130,000
Income (loss)	$(10,000)	$30,000

Since product T1 is not giving profit, Jay is considering discontinuing product T1 at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Product T2. What is the amount of change in net income for the current year that will result from the discontinuance of Product T1?

a. $70,000 increase.

b. $50,000 increase.

c. $50,000 decrease.

d. $70,000 decrease.

e. None of the above answers is correct.

Reference no: EM132830366

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What is amount of change in net income for the current year

Reference no: EM132830366

Reference no: EM132830366

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