Service Pro provides two kinds of services. During the most recent accounting period, the two service lines
Question:
Service Pro provides two kinds of services. During the most recent accounting period, the two service lines produced the following operating results:
Service revenue | $ 110,000 | $ 40,000 |
Unit-level materials | $ (26,000) | $ (8,000) |
Unit-level labor | $ (36,000) | $ (20,000) |
Product-level selling & administrative costs | $ (16,000) | $ (9,500) |
Company wide facility-level costs | $ (4,000) | $ (4,000) |
Net income | $ 28,000 | $(1,500) |
If the company stops providing Service 2:
| The company's income will increase by $3,500 per year. |
| The company's income will decrease by $3,500 per year. |
| The company's income will increase by $2,500 per year. |
| The company's income will decrease by $2,500 per year. |
Macroeconomics Principles Applications and Tools
ISBN: 978-0134420684
9th edition
Authors: Arthur O'Sullivan, Steven Sheffrin, Stephen Perez