Laurel Inc. has three product lines: A, B, and C.

	A		B		C		Total
Sales	$20,000		$35,000		$22,000		$77,000
Variable costs	8,000		10,000		14,000		32,000
Contribution margin	12,000		25,000		8,000		45,000
Fixed costs	4,000		11,000		9,000		24,000
Net income	$ 8,000		$14,000		$ (1,000)		$21,000

26. Management is considering dropping product line C. If it is discontinued, of its fixed costs are DTFC and can be avoided. The discontinuation of product line C would:

A.	decrease net income by $3,500.
B.	increase net income by $1,000.
C.	decrease net income by $500.

27. Management is considering dropping product line C. If it is discontinued, (1) all of its fixed costs are Common and cannot be avoided and (2) the selling price of Product A would increase by 45%. The discontinuation of product line C would:

A.	decrease net income by $3,500.
B.	increase net income by $1,000.
C.	decrease net income by $500.

D .increase net income by $3,500

28. Management is considering dropping product line C. If it is discontinued, (1) all of its fixed costs are Common and cannot be avoided and (2) the sales of Product B would increase by 30%. The discontinuation of product line C would:

A.	decrease net income by $3,500.
B.	increase net income by $1,000.
C.	decrease net income by $500.

D .increase net income by $3,500