ServicePro provides two kinds of services. During the most recent accounting period, the two service lines produced the following operating results:

	Service 1				Service 2
Service revenue	$	190,000			$	88,000
Unit-level materials	$	(42,000	)		$	(24,000	)
Unit-level labor	$	(52,000	)		$	(36,000	)
Product-level selling & administrative costs	$	(32,000	)		$	(25,500	)
Company wide facility-level costs	$	(3,000	)		$	(3,000	)
Net income (loss)	$	61,000			$	(500	)

If the company stops providing Service 2:

rev: 03_21_2018_QC_CS-122066

Multiple Choice

• The company's income will decrease by $2,500 per year.

• The company's income will increase by $2,500 per year.

• The company's income will decrease by $3,500 per year.

• The company's income will increase by $3,500 per year.