Lusk Corporation Produces and Sells 10,000 Units of Product X

Multiple Choice

Lusk Corporation produces and sells 10,000 units of Product X each month.The selling price of Product X is $40 per unit,and variable expenses are $32 per unit.A study has been made concerning whether Product X should be discontinued.The study shows that $70,000 of the $120,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued.If Product X is discontinued,the annual financial advantage (disadvantage) for the company of eliminating this product should be:

A) ($30,000)
B) $30,000
C) $40,000
D) ($40,000)