Question
The forecast income statement for Moscone, Inc. for next year is as follows: F G Total Sales Revenue $300,000 $190,000 $490,000 Total costs $290,000 $230,000
The forecast income statement for Moscone, Inc. for next year is as follows:
| F | G | Total |
Sales Revenue | $300,000 | $190,000 | $490,000 |
Total costs | $290,000 | $230,000 | $520,000 |
Income (loss) | $ 10,000 | ($40,000) | ($30,000) |
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Management is considering ending the production and sale of Product G at the beginning of next year. Ending Product G will have no effect on total fixed costs or on the sales of Product F. Product Gs fixed costs are about 14% of its total costs. Calculate the estimated amount of increase or decrease in net income next year that will result from ending production and sale of Product G.
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