A company has three product lines, one of which reflects the following results: Sales $215,000 Variable expenses 125,000 Contribution margin 90,000 Fixed expenses 130,000 Net loss $ (40,000) 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 company's net income will

a. decrease by $12,000.

b. increase by $40,000.

c. increase by $12,000.

d. decrease by $90,000.