Ace Company has two product lines The following income statements are shown for its two product lines and the company as a whole Office Supplies Computer Total Sales $250,000 $360,000 $610,000 Less Variable expenses 100,000 252,000 352,000 Contribution margin $150,000 $108,000 $258,000 Less Fixed expenses 70,000 120,000 190,000 Operating income $80,000 (12,000) $68,000 Additional information Management estimates that the dropping of the Computer product line would result in a $50,000 (20 ) decrease in sales in the Office Supplies product line Even if the Computer product line is dropped, only 75 of the Computer product lines fixed expenses will be eliminated Since the Computer product line incurred a loss, the company is considering dropping the product line If the Computer product line is dropped, the companys total income will A decrease by $68,000 B increase by $42,000 C decrease by $48,000 D increase by $12,000

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Ace Company has two product lines  The following income statements are shown for its two product lines and the company as a whole  Office Supplies Computer Total Sales $250,000 $360,000 $610,000 Less  Variable expenses 100,000 252,000 352,000 Contribution margin $150,000 $108,000 $258,000 Less  Fixed expenses 70,000 120,000 190,000 Operating income $80,000 (12,000) $68,000 Additional information  Management estimates that the dropping of the Computer product line would result in a $50,000 (20 ) decrease in sales in the Office Supplies product line  Even if the Computer product line is dropped, only 75  of the Computer product lines fixed expenses will be eliminated  Since the Computer product line incurred a loss, the company is considering dropping the product line  If the Computer product line is dropped, the companys total income will  A  decrease by $68,000 B  increase by $42,000 C  decrease by $48,000 D  increase by $12,000

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Ace Company has two product lines. The following income statements are shown for its two product lines and the company as a whole: Office Supplies

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	Office Supplies	Computer	Total
Sales	$250,000	$360,000	$610,000
Less: Variable expenses	100,000	252,000	352,000
Contribution margin	$150,000	$108,000	$258,000
Less: Fixed expenses	70,000	120,000	190,000
Operating income	$80,000	(12,000)	$68,000

	A.	decrease by $68,000
	B.	increase by $42,000
	C.	decrease by $48,000
	D.	increase by $12,000