The Hudson Corporation has 7,200 obsolete units of a product that are carried in Inventory at a manufacturing cost of $144,000. If the units are remachined for $32,800, they could be sold for $64,000. Alternatively, the units could be sold for scrap for $29,800. The alternative that is more desirable and the total relevant costs for that alternative are: O remachine: $32,800. scrap: $144,000. O scrap: $114,200 O remachine: $176,800. A study has been conducted to determine if one of the product lines of Kalamazoo Company should be discontinued. This product line generates a contribution margin of $310,000 per year. Fixed expenses allocated to the product line are $400,000 per year. It is estimated that $245,000 of these fixed expenses could be eliminated if the product line is discontinued. These data indicate that if the product line is discontinued, the company's overall net operating income would: Multiple Choice O increase by $65,000 per year. increase by $155,000 per year. decrease by $65,000 per year. decrease by $155,000 per year. 5 One of Simplex Company's products has a contribution margin of $46,000 and fixed costs totaling $56,000. If the product is dropped, $38,000 of the fixed costs will continue unchanged. As a result of dropping the product, the company's net operating income should: eBook Multiple Choice Print decrease by $46,000. decrease by $28,000. Increase by $28,000. O increase by $8,000