Kahn Company produces and sells 8,000 units of Product X each year. Each

unit of Product X sells for $10 and has a contribution margin of $6. It is

estimated that if Product X is discontinued, $50,000 of the $60,000 in fixed

costs charged to Product X could be eliminated. These data indicate that if

Product X is discontinued, overall company net operating income

should:

A)

increase by $2,000 per year

B)

decrease by $2,000 per year

C)

increase by $38,000 per year

D)

decrease by $38,000