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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 $480,000 $340,000 $140,000 Variable expenses 356,000 235,000 121,000 Contribution margin 124,000 105,000 19,000 Fixed expenses 76,000 38,000 38,000 Operating income (loss) $48,000 $67,000 $(19,000) Assuming fixed costs remain unchanged, how would discontinuing the Fashion line affect operating income? A. Decrease in total operating income of $140,000 B. Increase in total operating income of $124,000 c. Decrease in total operating income of $19,000 D. Increase in total operating income of $29,000
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