Diversified Machines Has Four Product Lines, One of Which Reflects

question 60

Multiple Choice

Diversified Machines has four product lines, one of which reflects the following results: $\begin{array}{lr}\text { Sales } & \$ 220,000 \\\text { Variable expenses } & 120,000 \\\text { Contribution margin } & 100,000 \\\text { Fixed expenses } & 120,000\\\text { Net loss }&\$(20,000) \end{array}$ If this product line is eliminated, 40% of the fixed expenses can be eliminated and the other 60% will be allocated to other product lines.If management decides to eliminate this product line, what will happen to the company's net income?

• A)It will increase by $20,000.
• B)It will decrease by $52,000.
• C)It will decrease by $32,000.
• D)It will increase by $48,000.

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Marine Habitats

Aquatic environments in the ocean where various types of marine organisms live, feed, and reproduce.

Marine Biodiversity

The variety of life forms within oceanic environments, including the diversity of species, ecosystems, and genetic variations.

Coral Reefs

Underwater ecosystems characterized by reef-building corals, known for their biodiversity.

Deep Ocean Floor

The abyssal regions of the ocean, characterized by high pressure, low temperature, and complete darkness, beyond the continental margin.