Q10

Marigold Machines has four product lines, one of which reflects the following results: Sales $214000 Variable costs 118000 96000 Contribution margin Fixed costs 118000 Net loss $(22000) If this product line is eliminated, 40% of the fixed costs can be eliminated and the other 60% will be allocated to other product lines. If management decides to eliminate this product line, what will happen to the company's net income? It will decrease by $26800. It will decrease by $48800. It will increase by $22000. It will increase by $47200