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A company currently has two product lines and is considering dropping Product 4 5 6 . Product 1 2 3 Product 4 5 6 Total

A company currently has two product lines and is considering dropping Product 456.
Product 123
Product 456
Total
Sales revenue
$20,000
$10,000
$30,000
Cost of goods sold (all variable)
$5,000
$4,000
$9,000
Contribution margin
$15,000
$6,000
$21,000
Fixed costs*
$9,000
$8,000
$17,000
Operating Profit (Loss)
$6,000
($2,000)
$4,000
If Product 456 is dropped, $5,000 of its total fixed costs will be saved. The other $3,000 will continue.
Based on this information, dropping Product 456 will (increase/decrease)
profits by $
.(Enter increase or decrease and the profit change as a whole number.)

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