Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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 38000 $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 OB. Increase in total operating income of $29,000 OC. Decrease in total operating income of $20,000 OD. Increase in total operating income of $125,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started