Consider the following segmented income statement to answer the following questions:

1. What would be the common fixed costs for the company if Product B were was dropped (no longer produced)?

2. Assume that all direct fixed costs are salary costs. By how much will net income change if Product B is dropped? Enter your answer as a positive number regardless of whether you think income will increase or decrease.

Product B Income Statement Sales revenue Variable costs Contribution margin Direct Fixed costs Seament margin Common fixed costs Net income Product A 89700 16100 73600 3680 69920 1794 68126 Total 151200240900 4620062300 105000178600 1050014180 94500164420 4818 91476159602 3024