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Firm A has three product lines with the following revenues and expenses: A B C Sales revenue $80,000 $42,000 $60,000 Variable expenses $65,000 $21,000 $12,000
Firm A has three product lines with the following revenues and expenses:
A
B
C
Sales revenue
$80,000
$42,000
$60,000
Variable expenses
$65,000
$21,000
$12,000
Contribution margin
$15,000
$21,000
$48,000
Fixed expenses
$19,000
$15,000
$17,000
Operating income(loss)
($4,000)
$6,000
$31,000
All fixed expenses are unavoidable. What is the effect on operating income of discontinuing product line A?
Group of answer choices
Decrease $15,000
Increase $19,000
Increase $15,000
Increase $4,000
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