Question

Crane Machines has four product lines, one of which reflects the following results: Sales $220000 Variable costs 116000 Contribution margin 104000 Fixed costs 116000 Net loss $(12000) If this product line is eliminated, 35% of the fixed costs can be eliminated and the other 65% will be allocated to other product lines. If management decides to eliminate this product line, what will happen to the company's net income? It will increase by $40600. It will decrease by $51400. It will decrease by $63400. It will increase by $12000.

          Crane Machines has four product lines, one of which reflects the following results:
Sales
$220000
Variable costs
116000
Contribution margin
104000
Fixed costs
116000
Net loss
$(12000)
If this product line is eliminated, 35% of the fixed costs can be eliminated and the other 65% will be allocated to other product lines. If
management decides to eliminate this product line, what will happen to the company's net income?
It will increase by $40600.
It will decrease by $51400.
It will decrease by $63400.
It will increase by $12000.

Crane Machines has four product lines, one of which reflects the following results:
Sales
220000
Variable costs
116000
Contribution margin
104000
Fixed costs
116000
Net loss(12000)
If this product line is eliminated, 35% of the fixed costs can be eliminated and the other 65% will be allocated to other product lines. If
management decides to eliminate this product line, what will happen to the company's net income?
It will increase by 40600.
It will decrease by51400.
It will decrease by 63400.
It will increase by12000.

Added by Heather C.

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