A Company Is Considering Eliminating a Product Line

Multiple Choice

A company is considering eliminating a product line. The fixed costs currently allocated to the product line will be allocated to other product lines upon discontinuance. If the product line is discontinued

A) total net income will increase by the amount of the product line's fixed costs.
B) total net income will decrease by the amount of the product line's fixed costs.
C) the contribution margin of the product line will indicate the net income increase or decrease.
D) the company's total fixed costs will decrease.