Question: Please help me solve the following question with steps on how to do it. I already have the answers, I just need someone to explain

Please help me solve the following question with steps on how to do it. I already have the answers, I just need someone to explain in clear steps on how to do this problem.

1) A condensed income statement for Tramco follows: (amounts are in thousands of dollars)

Products

F

G

H

Total

Sales (total)

$200

$180

$320

$700

Unit-level Variable Cost (total)

(120)

(160)

(200)

(480)

Contribution Margin

80

20

120

220

Facility-Level Fixed Cost

(25)

(30)

(40)

(95)

Income (Loss)

$ 55

$(10)

$ 80

$125

Tramcos management is considering whether to discontinue manufacturing product G at the beginning of the next year. Doing so will have no effect on total fixed costs and no effect on the sales or variable costs of products F and H. The change in income that would result from discontinuing product G is?

Ans: $20,000, decrease

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