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USE THE FOLLOWING INFORMATION FOR QUESTIONS 38-41 Tremaine Inc. has three product lines: A, B, and C. A C Total Sales $50,000 $85,000 $90,000 $225,000 Variable costs 30.000 30.000 44.000 104.000 Contribution margin 20.000 55,000 46,000 121,000 Fixed costs 23.000 25,000 18.000 66,000 Net income $13.000 $30.000 S SS 000 $28.000 38. Management is considering dropping product line A. If it is discontinued, its fixed costs are all common fixed costs. The discontinuation of product line A would: a Increase net income by $2,600 b. Decrease net income by $20,000. Increase net income by $6,500. d. Decrease net income by $2.000. e. Increase net income by $3,000. 39. Management is considering dropping product line A. If it is discontinued, $18,000 of its fixed costs are DTFC. The discontinuation of product line A would: a. Increase net income by $2.600 b. Decrease net income by $20,000. Increase net income by $6,500. d. Decrease net income by $2,000. Increase net income by $3,000. 40. Management is considering dropping product line A. If it is discontinued. (1) $18,000 of its fixed costs are DTFC and (2) the sales of Product C would increase by 10%. The discontinuation of product line A would: Increase net income by $2,600 b. Decrease net income by $20,000. c. Increase net income by $6.500. d. Decrease net income by $2,000. Increase net income by $3,000. 41. Management is considering dropping product line A. If it is discontinued, (1) $18,000 of its fixed costs are DTFC and (2) the selling price of Product B would increase by 10%. The discontinuation of product line A would: Increase net income by $2,600 b. Decrease net income by $20.000. c. Increase net income by $6,500. d. Decrease net income by $2.000. Increase net income by $3,000