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 made 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 was discontinued.These data indicate that if Product A is discontinued,the company's overall net operating income would:

A) decrease by $60,000 per month
B) increase by $10,000 per month
C) increase by $20,000 per month
D) decrease by $20,000 per month