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Rings Company has three product lines, A, B, and C. The following financial information is available: Item Product Line A Product Line B Product Line

Rings Company has three product lines, A, B, and C. The following financial information is available:

Item Product Line A Product Line B Product Line C
Sales $ 52,000 $ 100,000 $ 23,000
Variable costs $ 31,200 $ 53,000 $ 14,375
Contribution margin $ 20,800 $ 47,000 $ 8,625
Fixed costs:
Avoidable $ 5,400 $ 14,500 $ 6,300
Unavoidable $ 4,100 $ 10,000 $ 3,100
Pre-tax operating income $ 11,300 $ 22,500 $ (775)

If Product Line C is discontinued and the manufacturing space formerly devoted to this line is rented for $6,000 per year, pre-tax operating income for the company will likely:


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