Question
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?
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Principles Of Food Beverage And Labor Cost Controls
Authors: Paul R. Dittmer, J. Desmond Keefe
8th Edition
0471429929, 978-0471429920
