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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 fixed costs remain unchanged, how would discontinuing the Fashion line affect operating income? O A. Decrease in total operating income of $140,000 O B. Increase in total operating income of $29,000 O C. Increase in total operating income of $125,000 OD. Decrease in total operating income of $20,000 Comfort Cloud manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but currently produces and sells 75,000 seats per year. The following information relates to current production: (Click the icon to view the data.) If a special sales order is accepted for 2,700 seats at a price of $350 per unit, fixed costs increase by $6,600, and variable marketing and administrative costs for that order are $1 per unit, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.) i Data Table O A. Increase by $290,400 OB. Decrease by $287,700 O C. Increase by $294,300 OD. Increase by $287,700 Sales price per unit S430 Variable costs per unit: Manufacturing Marketing and administrative S240 $80 Manufacturing Marketing and administrative $760,000 $220,000 Print Done Click to enlar g e
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