A Company has three product lines?D, E, and F. The following information is available:

Company is thinking of dropping product line F because it is reporting an operating loss.

Assuming fixed costs are unavoidable, if Company drops product line F, and rents the space formerly used to produce product F for $17,000 per year, total income will be:

Sales Variable costs Contribution margin Fixed expenses Operating income (loss) E $70,000 $40,000 (40,000) (20,000) 30,000 20,000 (15,000) (15,000) $15,000 $5,000 D F $30,000 (10,000) 20,000 (25,000) ($5,000)