Bordeaux Company Has Three Product Lines One of Which Reflects

question 134

Multiple Choice

Bordeaux Company has three product lines one of which reflects the following results: $\begin{array}{lr}\text { Sales } & \$ 215,000 \\\text { Variable expenses } & 125,000 \\\text { Contribution margin } & 90,000 \\\text { Fixed expenses } & 150,000 \\\text { Net loss } & \$(60,000) \end{array}$ If this product line is eliminated 50% of the fixed expenses can be eliminated and the other 50% will be allocated to other product lines. If management decides to eliminate this product line the company's net income will

• A) increase by $60000.
• B) decrease by $90000.
• C) decrease by $15000.
• D) increase by $15000.

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