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ROY Company has three product lines in its retail stores: W101, W200, and W250. Results of the fourth quarter are presented below: Total Revenue Variable
ROY Company has three product lines in its retail stores: W101, W200, and W250. Results of the fourth quarter are presented below: Total Revenue Variable Costs Direct Fixed Costs General Fixed Costs Net Income (Loss) W101 $33,000 15,000 5,000 4.000 $9,000 W 200 $20,000 14,000 4,000 W250 S42,000 27,000 6,000 2.000 $7,000 $95,000 56,000 15,000 10,000 $14,000 4.000 $(2,000) The general fixed costs are unavoidable. ROY Company decided to drop the W200 product line to stop the loss. The company's decision to drop the W200 product line will:* Increase net income by $2,000 Increase net income by $4,000 Decrease net income by $6,000 Decrease net income by $8,000 None of the above The total net income of the company as a result of dropping the product W200 will be: * $6,000 $8,000 $12,000 O $16,000 None of the above Do you agree with the company's decision to drop the product W200?* Agree Disagree
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