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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 Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $385,000 $62,000 $323,000 $102,000 $221,000 Cat Food $300,000 $22,000 $278,000 $50,000 $228,000 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? A. Decrease in total operating income of $45,000 B. Increase in total operating income of $176,000 C. Decrease in total operating income of $397,000 D. Increase in total operating income of $7,000
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