12. Bubblemania has three product lines - A, B, and C.

A B C Total

Sales$10,000

Variable costs Contribution Margin Fixed costs

Net income

9,000 12,000 7,000 6,000 2,000 6,000 6,000 3,000 31,000 17,500 13,500 12,500 

1,000

4,500 5,500 3,500 2,000 (4,000) 3,000 

Product line B appears unprofitable, and management is considering discontinuing the line. How would the discontinuation of Product line B affect net income?

a. increase by $4,000 b. decrease by $4,000 c. increase by $2,000 d. decrease by $2,000 e. increase by $6,000