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 Hiking Fashion $480,000 $340,000 $140,000 134,000 6,000 38,000 $35,000 $67,000 $(32,000) 369,000 235,000 111,000 105,000 38,000 76,000 Assuming fixed costs remain unchanged, how would discontinuing the Fashion line affect operating income? OA. Decrease in total operating income of $6,000 O B. Increase in total operating income of $111,000 C. Increase in total operating income of $29,000 O D. Decrease in total operating income of $140,000
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