Question
Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: Total Hiking Fashion Sales revenue
Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: Total Hiking Fashion Sales revenue $ 530 comma 000 $ 390 comma 000 $140,000 Variable expenses 405 comma 000 285 comma 000 120,000 Contribution margin 125 comma 000 105 comma 000 20,000 Fixed expenses 79 comma 000 39 comma 500 39 comma 500 Operating income (loss) $46 comma 000 $ 65 comma 500 $( 19 comma 500 ) If $ 30 comma 000 of fixed costs will be eliminated by discontinuing the Fashion line, how will operating income be affected?
A. Increase $ 52 comma 000
B. Increase $ 10 comma 000
C. Increase $ 98 comma 000
D. Decrease $ 45 comma 500
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