ABC Company Produces and sells three Products A, B, C.

	Product A	Product B	Product C	Total
Sales	$100,000	$200,000	$300,000	$600,000
Less Cost of goods sold	80,000	150,000	200,000	430,000
Gross margin	20,000	50,000	100,000	170,000
Less Operating expenses	30,000	70,000	70,000	170,000
Net operating income	$(10,000)	$(20,000)	$30,000	$0

For each segment, 40% of its cost of goods sold and operating expenses are variable expenses and the remaining balances are fixed expenses. Total fixed expenses (operating and manufacturing) were allocated to each segment as follows:

Fixed Expenses Allocated to Each Segment
Product A	$10,000
Product B	$50,000
Product C	$70,000

How much is the total cost that the company can save, if Product A was dropped?

Select one:

a. $110,000

b. $68,000

c. $100,000

d. $90,000