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A company is considering eliminating a product line. The fixed costs currently allocated to the product line will be allocated to other product lines upon discontinuance. If the product line is...

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A company is considering eliminating a product line. The fixed costs currently allocated to the product line will be allocated to other product lines upon discontinuance. If the product line is discontinued,



A total net income will increase by the amount of the product line's fixed costs.



B the contribution margin of the product line will indicate the net income increase or decrease.



C the company's total fixed costs will decrease.



D total net income will decrease by the amount of the product line's fixed costs.
Answered Same Day Dec 24, 2021

Solution

David answered on Dec 24 2021
112 Votes
A company is considering eliminating a product line. The fixed costs cu
ently
allocated to the product line will be allocated to other product lines upon
discontinuance. If the product line is discontinued,
a total net income will increase by the amount of the product line's fixed costs.
B the contribution margin of the product line will indicate the net income increase
or...
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