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A business has three product lines: small, medium, and large speakers. The small speaker line has a loss from operations of $25,000, while the medium and large speaker lines have a combined income from operations of $100,000. The total fixed costs of $50,000 are allocated on the basis of sales volume across the three product lines. The small product line has 30% of the sales volume. What is the differential income or loss from discontinuing the small speaker product line?

A. $10,000 income

B. $25,000 income

C. $10,000 loss

D. $15,000 loss

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Accounting Basics, Accounting

Category:- Accounting Basics
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