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Contribution margin income statement data for the most recent year follow: Total Cat Food Dog Food Sales revenue $385,000 $300,000 $85,000 Variable expenses $205,000 $165,000
Contribution margin income statement data for the most recent year follow: Total Cat Food Dog Food Sales revenue $385,000 $300,000 $85,000 Variable expenses $205,000 $165,000 $40,000 Contribution margin $180,000 $135,000 $45,000 Fixed expenses $102,000 $50,000 $52,000 Operating income (loss) $78,000 $85,000 $(7,000) Assuming the Dog food line is discontinued, and all fixed costs will go away, how will operating income be affected? O O OO A. Decrease $7,000 B. Decrease $45,000 C. Increase $45,000 D. Increase $7,000
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