Macaulay Company Has Three Product Lines-D, E, and F

Multiple Choice

Macaulay Company has three product lines-D, E, and F. The following information is available: Macaulay Company is thinking of dropping product line F because it is reporting an operating loss. Assuming fixed costs are unavoidable, if Macaulay Company drops product line F, and rents the space formerly used to produce product F for $17,000 per year, total income will be:

A) $10,000.
B) $12,000.
C) $20,000.
D) $25,000.