Diversified Machines has four product lines, one of which reflects the following results: If this product line is eliminated, 40% of the fixed expenses can be eliminated and the other 60% will be allocated to other product lines.If management decides to eliminate this product line, what will happen to the company's net income?
A)It will increase by $20,000.
B)It will decrease by $52,000.
C)It will decrease by $32,000.
D)It will increase by $48,000.

Question

Diversified Machines has four product lines, one of which reflects the following results:  If this product line is eliminated, 40% of the fixed expenses can be eliminated and the other 60% will be allocated to other product lines.If management decides to eliminate this product line, what will happen to the company's net income?
A)It will increase by $20,000. 
B)It will decrease by $52,000. 
C)It will decrease by $32,000. 
D)It will increase by $48,000.

Quizplus · Accepted Answer

The Answer of Diversified Machines has four product lines, one of which reflects the following results:  If this product line is eliminated, 40% of the fixed expenses can be eliminated and the other 60% will be allocated to other product lines.If management decides to eliminate this product line, what will happen to the company's net income?
A)It will increase by $20,000. 
B)It will decrease by $52,000. 
C)It will decrease by $32,000. 
D)It will increase by $48,000.

Diversified Machines Has Four Product Lines, One of Which Reflects