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8. Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Sales revenue Variable expenses

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8. Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total Luxury Sporty $490.000 $360,000 $130,000 355.000 235.000 120,000 135,000 125.000 10.000 76,000 38.000 38.000 $59.000 $87.000 $(28.000 If $20,000 of fixed costs will be eliminated by discontinuing the Sporty line, how will operating income be affected? A) Decrease $30,000 B) Increase $10,000 C) Increase $69.000 D) Increase $128.000

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