stion 14
yet
vered
ts out of
lag
stion
You are provided with the following information for
Products G E and H:
Sales
340,000
$220,000
300,000
Less: Variable Cost 190,000
180,000
220,000
Contribution Margin
120,000
30,000
120,000
Less: Fixed Costs
50,000 40,000
50,000
Income (loss) from operations (20,000)
70,000 80,000
Management is considering the discontinuance of
Product G. The discontinuance will have no effect
on fixed costs and expenses for Products E and
H. What is the amount of change in net income for the
current year that will result from the discontinuance of
Product G?
Select one:
a. $20,000 increase
b. 30,000 increase
c. 20,000 decrease
d. $30,000 decrease
