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2. Bubblemania has three product lines - A, B, and C. A B C Total Sales $10,000 9,000 12,000 31,000 Variable costs 4,500 7,000 6,000
2. Bubblemania has three product lines - A, B, and C.
A
B
C
Total
Sales
$10,000
9,000
12,000
31,000
Variable costs
4,500
7,000
6,000
17,500
Contribution Margin
5,500
2,000
6,000
13,500
Fixed costs
3,500
6,000
3,000
12,500
Net income
2,000
(4,000)
3,000
1,000
Product line B appears unprofitable, and management is considering discontinuing the line. How
would the discontinuation of Product line B affect net income?
a. increase by $4,000
b. decrease by $4,000
c. increase by $2,000
d. decrease by $2,000
e. increase by $6,00
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