Answered step by step
Verified Expert Solution
Question
1 Approved Answer
All About Animals has two product lines: Cat food and Dog food. Contribution margin income statement data for the most recent year follow: Sales revenue
All About Animals has two product lines: Cat food and Dog food. Contribution margin income statement data for the most recent year follow: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $395,000 $64,000 $331,000 $100,000 $231,000 Cat Food $310,000 $24,000 $286,000 $48,000 $238,000 Dog Food $85,000 $40,000 $45,000 $52,000 $(7,000) Assuming total fixed costs remain unchanged, how would discontinuing the Dog food line affect operating income? O A. Decrease in total operating income of $417,000 OB. Increase in total operating income of $7,000 O C. Decrease in total operating income of $45,000 OD. Increase in total operating income of $186,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started