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Watson corp manufactures and sell 20000 units of product x

Watson Corp. manufactures and sell 20,000 units of product X each month. Each unit sells for $16.00 and has a contribution margin of $5.00. If we discontinue product X, $66,000.00 in fixed costs would be saved each month and there would be no effect on the sales volume of our other products. If product X is discontinued, Watson Corp's monthly income before taxes would:

A. Increase by $100.000.
B Increase by $34,000.
C. Decrease by $100,000.
D. Decrease by $34,000.

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Accounting Basics: Watson corp manufactures and sell 20000 units of product x

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