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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 355,000 235,000 120,000 Contribution margin 125,000 105,000 20, 000 Fixed expenses 76,000 38,000 38,000 Operating income (loss) $49,000 $67,000 $ 18,000) Assuming fixed costs remain unchanged, how would discontinuing the Fashion line affect operating income? O Decrease in total operating income of $78,000 O Increase in total operating income of $29,000 O Decrease in total operating income of $20,000 O Increase in total operating income of $132,000
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