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Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: Sales revenue Variable expenses Contribution
Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $500,000 385,000 115,000 81,000 $34,000 Hiking $360,000 265,000 95,000 40,500 $54,500 Fashion $140,000 120,000 20,000 40,500 $(20,500) If $30,000 of fixed costs will be eliminated by discontinuing the Fashion line, how will operating income be affected? O A. Increase $39,000 O B. Decrease $45,500 OC. Increase $73,000 OD. Increase $10,000
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