ServicePro provides two kinds of services. During the most recent accounting period, the two service lines produced the following operating results: Service 1 Service 2Service revenue$105,000? $35,000? Unit-level materials$(25,000) $(7000)Unit-level labor$(35,000) $(19,000)Product-level selling & administrative costs$(15,000) $(8500)Company wide facility-level costs$(5000) $(5000)Net income (loss)$25,000? $(4500)If the company stops providing Service 2:
A. The company's income will decrease by $500 per year.
B. The company's income will increase by $1500 per year.
C. The company's income will increase by $500 per year.
D. The company's income will decrease by $1500 per year.
Answer: A
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