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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 Varable expenses Contribution margin Fixed expenses Operating income (loss) Total Cat Food Dog Food $385,000 $300,000 $85,000 $203,000 $170,000 $33,000 $182,000 $130,000 $52,000 $102,000 $50,000 $52,000 S0 $80,000 $80,000 Assuming the Dog food line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the Dog food line is used to double the production of Cat food, how will operating income be affected? O A. Increase $130,000 O B. Decrease $78,000 OC. Increase $260,000 D. Increase $78,000
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