Lusk Company Produces and Sells 15,000 Units of Product a Each

Multiple Choice

Lusk Company produces and sells 15,000 units of Product A each month.The selling price of Product A is $20 per unit,and variable expenses are $14 per unit.A study has been conducted concerning whether Product A should be discontinued.The study shows that $70,000 of the $100,000 in fixed expenses charged to Product A would continue even if the product were discontinued.These data indicate that if Product A were discontinued,the company's overall monthly operating income would change by how much?

A) An increase of $10,000.
B) An increase of $20,000.
C) A decrease of $20,000.
D) A decrease of $60,000.