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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 395,000 275,000 120.000 Contribution margin 85,000 65,000 20,000 Fixed expenses 78,000 39,000 39,000 Operating income (loss) $7,000 $26,000 $(19,000) If $26,000 of fixed costs will be eliminated by discontinuing the Fashion line, how will operating income be affected? O A. Increase $22,000 O B. Decrease $47.000 OC. Increase $6.000 OD. Increase $15,000
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