After a few years of successful business, Thomas saw the need to diversify his business to take advantage of the growth potential of new markets. Doing so also reduces the business risk. He set up a new company that sells 3 models of tables: Russian style, Italian style, and Mexican style. His targeted market was in NYC where there is huge demand for those products. Operating results for June are below:

Question: Without creating a new income statement and using your results from your analysis in part A, determine the amount of the companys new net income if Italian style is discontinued. SHOW YOUR CALCULATIONS

	Russian style	Italian style	Mexican style	Total
Units sold	400	450	350	1,200
Revenue	$36,000	$22,500	$35,000	$93,500
Variable departmental costs	14,000	13,500	17,500	45,000
Avoidable fixed costs	6,000	4,000	5,000	15,000
Unavoidable fixed costs	8,000	9,000	7,000	24,000
Net income	$ 8,000	($ 4,000)	$ 5,500	$ 9,500

Results from part A:

	Russian Style		Italian Style
Particulars	Current	Incremental	Current
Units Sold	400	480	450
Revenue	36000	43200	22500
Variable departmental cost	14000	16800	13500
Avoidable fixed cost	6000	6000	4000
Unavoidable Fixed cost	8000	8000	9000
Net income	8000	12400	-(4000)