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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 $480,000 355,000 125,000 76,000 $49,000 Hiking $340,000 235,000 105,000 38,000 $67,000 Fashion $140,000 120,000 20,000 38,000 $(18,000) Assuming the Fashion line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $30,000 per year, how will operating income be affected? O Increase $50,000 Increase $162,000 Increase $10,000 Decrease $10,000
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