The following summarized data are shown in the projected income statement of Rachel Inc. for two of its product lines X and Y: Projected Income Statement Name of the product lines X Y Sales 370,000 190,000  Costs:          Variable costs (230,000) (140,000)      Fixed costs (70,000) (60,000)      Total costs (300,000) (200,000) Income (loss)  70,000 (10,000) Management is considering shutting down the production and sale of Product Y. The shutdown would have no effect on the total fixed costs and on the sales of Product X. What would be the amount of expected change in profit that would result from the shutting down of Product Y? Group of answer choices Profit would be decreased by $50,000 Profit would be increased by $50,000 Profit would be decreased by $10,000 Profit would be increased by $10,000

Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter8: Tactical Decision-making And Relevant Analysis
Section: Chapter Questions
Problem 11MCQ: Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett...
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The following summarized data are shown in the projected income statement of Rachel Inc. for two of its product lines X and Y:

Projected Income Statement
Name of the product lines X Y
Sales 370,000 190,000
 Costs:    
     Variable costs (230,000) (140,000)
     Fixed costs (70,000) (60,000)
     Total costs (300,000) (200,000)
Income (loss)  70,000 (10,000)

Management is considering shutting down the production and sale of Product Y. The shutdown would have no effect on the total fixed costs and on the sales of Product X. What would be the amount of expected change in profit that would result from the shutting down of Product Y?

Group of answer choices
Profit would be decreased by $50,000
Profit would be increased by $50,000
Profit would be decreased by $10,000
Profit would be increased by $10,000
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