Brevard Industries Produces Two Products The Company's Fixed Costs Totaled $70,000,of Which $15,000 Can Be

Multiple Choice

Brevard Industries produces two products.Information about the products is as follows:
$$\begin{array} { | l | r | r | } \hline & \text { Procuct 1 } & \text { Procuct 2 } \\\hline \text { Units produced and sold } & \$ 4,000 & 10,000 \\\hline \text { Selling price per unit } & \$ 15 & \$ 13 \\\hline \text { Variable costs per unit } & 9 & 8 \\\hline\end{array}$$
The company's fixed costs totaled $70,000,of which $15,000 can be directly traced to Product 1 and $40,000 can be directly traced to Product 2.The effect on the firm's profits if Product 2 is dropped would be a:

A) $10,000 increase.
B) $35,000 increase.
C) $35,000 decrease.
D) $10,000 decrease.