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

A

B

C

Total

Sales

$10,000

9,000

12,000

31,000

Variable costs

4,500

7,000

6,000

17,500

Contribution Margin

5,500

2,000

6,000

13,500

Fixed costs

3,500

6,000

3,000

12,500

Net income

2,000

(4,000)

3,000

1,000

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 $6,00