The condensed income statement for a Fletcher Inc. for the past year is as follows:...
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Accounting
The condensed income statement for a Fletcher Inc. for the past year is as follows:
| Product | ||||
| F | G | H | Total | |
| Sales | $300,000 | $210,000 | $340,000 | $850,000 |
| Costs: | ||||
| Variable costs | $(180,000) | $(180,000) | $(220,000) | $(580,000) |
| Fixed costs | (50,000) | (50,000) | (40,000) | (140,000) |
| Total costs | $(230,000) | $(230,000) | $(260,000) | $(720,000) |
| Income (loss) | $70,000 | $(20,000) | $80,000 | $130,000 |
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. The amount of change in profit for the current year that will result from the discontinuance of Product G is a
a.$20,000 increase
b.$20,000 decrease
c.$30,000 decrease
d.$30,000 increase
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