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Can someone help me with this question? ServicePro provides two kinds of services. During the most recent accounting period, the two service lines produced the
Can someone help me with this question?
ServicePro provides two kinds of services. During the most recent accounting period, the two service lines produced the following operating results:
Service 1 | Service 2 | |
Service revenue | $80,000 | $20,000 |
Unit-level materials | (20,000) | (2,000) |
Unit-level labor | (30,000) | (14,000) |
Product-level selling & administrative costs | (10,000) | (2,500) |
Company wide facility-level costs | (5,000) | (5,000) |
Net income | $15,000 | $ (3,500) |
If the company stops providing Service 2:
- A) The company's income will decrease by $1,500 per year.
- B) The company's income will increase by $1,500 per year.
- C) The company's income will decrease by $3,500 per year.
- D) The company's income will increase by $3,500 per year.
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