Business, 14.03.2020 04:23 ssiy

ServicePro provides two kinds of services. During the most recent accounting period, the two service lines produced the following operating results:

Service 1 Service 2
Service revenue $ 110,000 $ 40,000
Unit-level materials $ (26,000 ) $ (8,000 )
Unit-level labor $ (36,000 ) $ (20,000 )
Product-level selling & administrative costs $ (16,000 ) $ (9,500 )
Company wide facility-level costs $ (4,000 ) $ (4,000 )
Net income $ 28,000 $ (1,500 )

If the company stops providing Service 2:

The company's income will increase by $3,500 per year.
The company's income will decrease by $3,500 per year.
The company's income will increase by $2,500 per year.
The company's income will decrease by $2,500 per year.

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ServicePro provides two kinds of services. During the most recent accounting period, the two service...

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