Black Bear Merchandising Inc. has three product lines in its retail stores: books, videos, and music. Results of the fourth quarter are presented below:

The allocated fixed costs are unavoidable. Demand for individual products is not affected by changes in other product lines.
Instructions
What will happen to profits if Black Bear discontinues the Books product line?

Videos Books Music Total $24,000 $40,000 $28,000 12,000 3,000 $92,000 Revenue Variable departmental costs Direct fixed costs Allocated fixed costs Net income (loss) 16,000 21,000 49,000 13,000 4,000 6,000 5,000 $ (1,000) 5,000 $ 8.000 5,000 $ 8,000 15,000 $ 15,000