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Quentin Company Is Considering Whether It Should Eliminate a Product

Question 39

Multiple Choice

Quentin Company is considering whether it should eliminate a product line. Currently, the company has fixed costs which are allocated to all product lines. Should Quentin Company eliminate the product line, the fixed costs currently allocated to the product line will have to be allocated to the other remaining product lines in total. If the product line is eliminated,


A) total income for the company will increase by the amount of the product line's fixed costs.
B) total income for the company will decrease by the amount of the product line's fixed costs.
C) the contribution margin of the product line will reflect the increase or decrease in the company income.
D) the company's total fixed costs will decrease.

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