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What would be the effect on net income

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Question - Richmond Company is considering eliminating one of its products, product A, which costs $60,000 a year to produce but only provides $55,000 in revenues. Careful analysis shows that two-thirds of the cost could be eliminated by dropping product A. What would be the effect on net income of eliminating product A?

A. $15,000 decrease

B. $15,000 increase

C. $ 5,000 increase

D. $ 5,000 decrease

Reference no: EM132106004

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