Tremaine Inc. has three product lines: A, B, and C. A B Total Sales $50,000 $85,000 $90,000 $225,000 Variable costs 30,000 30,000 44.000 104,000 Contribution margin 20,000 55,000 46,000 121,000 Fixed costs 23,000 25,000 18,000 66,000 Net income $ (3,000) $30,000 $28,000 $ 55.000 38. Management is considering dropping product line A. If it is discontinued, its fixed costs are all common fixed costs. The discontinuation of product line A would: a. Increase net income by $2,600 b. Decrease net income by $20,000. c. Increase net income by $6,500. d. Decrease net income by $2,000. e. Increase net income by $3,000. 39. Management is considering dropping product line A. If it is discontinued, $18,000 of its fixed costs are DTFC. The discontinuation of product line A would: a. Increase net income by $2,600 b. Decrease net income by $20,000. c. Increase net income by $6,500. d. Decrease net income by $2,000. e. Increase net income by $3,000. 40. Management is considering dropping product line A. If it is discontinued, (1) $18,000 of its fixed costs are DTFC and (2) the sales of Product C would increase by 10%. The discontinuation of product line A would: a. Increase net income by $2,600 b. Decrease net income by $20,000. c. Increase net income by $6,500. d. Decrease net income by $2,000. e. Increase net income by $3,000. 41. Management is considering dropping product line A. If it is discontinued, (1) $18,000 of its fixed costs are DTFC and (2) the selling price of Product B would increase by 10%. The discontinuation of product line A would: a. Increase net income by $2,600 b. Decrease net income by $20,000. c. Increase net income by $6,500. d. Decrease net income by $2,000. e. Increase net income by $3,000.