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Alpine Stove Company has two product lines: Gas stoves and Wood stoves. Income statement data for the most recent year is shown below: Sales revenue
Alpine Stove Company has two product lines: Gas stoves and Wood stoves. Income statement data for the most recent year is shown below: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $490,000 355,000 135,000 76,000 $59.000 Gas $345,000 235.000 110,000 38.000 $72.000 Wood $145,000 120.000 25,000 38.000 ($13.000 Assume that fixed costs remain unchanged. How would discontinuing the Wood stove product line affect operating income? Decrease in total operating income of $145,000 Increase in total operating income of $13,000 Decrease in total operating income of $25,000 Increase in total operating income of $24,000
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