1.A company has three product lines, one of which reflects the following results: Sales 330,000 Variable expenses 170,000 Contribution margin 160,000 Fixed expenses 190,000 Net loss (30,000) If this...

1.A company has three product lines, one of which reflects the following results:

Sales 330,000

Variable expenses 170,000

Contribution margin 160,000

Fixed expenses 190,000

Net loss (30,000)

If this product line is eliminated, 70% of the fixed expenses can be eliminated and the other 30% will be allocated to other product lines. If management decides to eliminate this product line, the company's net income will

1. 
   increase by $103,000
   


2. 
   decrease by $103,000
   


3. 
   decrease by $27,000
   


4. 
   increase by $30,000