USE THE FOLLOWING INFORMATION FOR QUESTIONS 4245

Carlton Products has three product lines: A, B, and C.

	A		B		C		Total
Sales	$500,000		$550,000		$700,000		$1,750,000
Variable costs	280,000		420,000		300,000		1,000,000
Contribution margin	220,000		130,000		400,000		750,000
Fixed costs	100,000		140,000		150,000		390,000
Net income	$120,000		$ (10,000)		$250,000		$ 360,000

42. Management is considering dropping product line B. If it is discontinued, all of its fixed costs are AVOIDABLE. The discontinuation of product line B would:

a.	decrease net income $10,000.
b.	increase net income $130,000.
c.	decrease net income $130,000.
d.	increase net income $10,000.

43. Management is considering dropping product line B. If it is discontinued, all of its fixed costs are UNAVOIDABLE. The discontinuation of product line B would:

a.	decrease net income $10,000.
b.	increase net income $130,000.
c.	decrease net income $130,000.
d.	increase net income $10,000.

44. Management is considering dropping product line B. If it is discontinued, (1) $100,000 of its fixed costs are DTFC and (2) sales of product line C are increased by 60%. The discontinuation of product line B would:

a.	decrease net income $6,000.
b.	increase net income $106,000.
c.	decrease net income $106,000.
d.	increase net income $6,000.

45. Management is considering dropping product line B. If it is discontinued, (1) $100,000 of its fixed costs are COMMON FC and (2) the selling price of product line A is increased by 10%. The discontinuation of product line B would:

a.	decrease net income $90,000.
b.	increase net income $40,000.
c.	decrease net income $40,000.
d.	increase net income $90,000.