Respuesta :
Answer:
Company's net income will increase by $2500 if the product line is discontinued.
Explanation:
From the data given:
Sales                    25000
variable cost (less) Â Â Â Â Â Â Â Â 19000
contribution margin        6000
Fixed costs
directed fixed costs         7000
allocated fixed costs        5000
net income               -6000
Fixed cost savings          7000
rental revenue              1500
total savings if discontinued   8500
contribution margin (less) Â Â Â Â 6000
net income increased by      2500