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11) Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Tota Luxury Sporty Sales
11) Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Tota Luxury Sporty Sales revenue $490,000 $360,000 $130,000 Variable expenses 355,000 235,000 120,000 Contribution margin 135,000 125,000 10,000 Fixed expenses 76,000 38,000 38,000 Operating income (loss) $59,000 $87,000 $128,000) Assuming fixed costs remain unchanged, how would discontinuing the Sporty line affect operating income? A) Increase in total operating income of $49,000 B) Increase in total operating income of $142,000 C) Decrease in total operating income of $10,000 D) Decrease in total operating income of $108,000
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