1. A budget period should be

monthly.

long-term.

long enough to provide an obtainable goal under normal business conditions.

for a year or more.

2. A company has three product lines, one of which reflects the following results:

Sales	$226000
Variable expenses	129000
Contribution margin	97000
Fixed expenses	130000
Net loss	$ (33000)

If this product line is eliminated, 60% of the fixed expenses can be eliminated and the other 40% will be allocated to other product lines. If management decides to eliminate this product line, the companys net income will

decrease by $19000.

decrease by $97000.

increase by $33000.

increase by $19000.