#6 - Chapter 8 K Part 1 of 3 Suppose Smiley O is considering discontinuing its fruity nings product line Assume that during the past year, the fruity rings' product line income statement showed the following (Click the icon to view the income statement data) (Click the icon for additional information) if the company decides to discontinue the product line, what will happen to the company's operating income? Should Smiley O discontinue the fruity rings product line? Begin by prepanng a contribution margin income statement for the fruity nngs' product line (Uso a minis sign or parentheses to enter a loss) Sales revenue Less Vanab Contribubon ma More info Less Fixed d Operating incon Food manufacturing overhead costs account for 40% of the cost of goods, while only 30% of the operating expenses are faxed Since the fruity rings ine is just one of the company's cereal operabons, only $755,000 of drect fixed costs (the majority of which is advertning) will be eliminated if the product line is discontinued The remander of the fixed costs will stil be incurred by the company Etext pages Get more help- Print Done X Data table B 1 Sales revenue $ 5300,000 2 Less: Cost of goods sold 6.300,000 Gross profit 1,000,000) 4 Less: Operating expenses 1.650 000 5 Operating income (loss) S (2.650.000) Print Done