The condensed income statement for a business for the past year is as follows: Product T Product U Sales $500,000 $750,000 Less variable costs 400,000 550,000 Contribution margin 100,000 200,000 Less fixed costs 135,000 120,000 Income (loss) from operations $(35,000) $ 80,000 Management is considering discontinuing the manufacture and sale of Product T starting at the beginning of the current year. Discontinuing T will have no effect on total fixed costs or on the sales and expenses of Product U. What is the amount of change in net income for the current year that will result from discontinuing Product T? Group of answer choices $35,000 decrease $35,000 increase $100,000 decrease $100,000 increase
The condensed income statement for a business for the past year is as follows:
Product T Product U
Sales $500,000 $750,000
Less variable costs 400,000 550,000
Contribution margin 100,000 200,000
Less fixed costs 135,000 120,000
Income (loss) from operations $(35,000) $ 80,000
Management is considering discontinuing the manufacture and sale of Product T starting at the beginning of the current year. Discontinuing T will have no effect on total fixed costs or on the sales and expenses of Product U. What is the amount of change in net income for the current year that will result from discontinuing Product T?
Group of answer choices
$35,000 decrease
$35,000 increase
$100,000 decrease
$100,000 increase
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