The condensed income statement for Northeast Products Co. for the past year is presented as...
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Accounting
The condensed income statement for Northeast Products Co. for the past year is presented as follows:
| Product | ||||
| Rims | Covers | Clamps | Total | |
| Sales | $300,000 | $320,000 | $340,000 | $960,000 |
| Less variable costs | 180,000 | 190,000 | 220,000 | 590,000 |
| Contribution margin | $120,000 | $ 130,000 | $120,000 | $370,000 |
| Less fixed costs | 50,000 | 140,000 | 150,000 | 340,000 |
| Income (loss) from operations. | $ 70,000 | $ (10,000) | $ (30,000) | $ 30,000 |
Management is considering the discontinuance of the manufacture and sale of Clamps 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 the other products. What is the amount of change in income from operations for the current year that will result from the discontinuance of Clamps?
Group of answer choices
$150,000 decrease
$340,000 decrease
$120,000 decrease
$120,000 increase
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