The condensed income statement for a business for the past year is presented as

Question

The condensed income statement for a business for the past year is presented as follows:

Management is considering the discontinuance of the manufacture and sale of Product G at the beginning of the current year. The discontinuance would have no effect on the total fixed costs and expenses or on the sales of Products F and H. What is the amount of change in net income for the current year that will result from the discontinuance of Product G?

A. $20,000 increase

B. $20,000 decrease

C. $30,000 increase

D. $30,000 decrease

Explanation / Answer

C$30,000 increase

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