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Contribution margin income statement data for the most recent year follow Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $385,000 $205,000
Contribution margin income statement data for the most recent year follow Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $385,000 $205,000 $180,000 $102,000 $78,000 Cat Food $300,000 $165,000 $135,000 $50,000 $85,000 Dog Food $85,000 $40,000 $45,000 $52,000 $(7,000) Assuming the Dog food line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the Dog food line is used to double the production of Cat food, how will operating income be affected? O A. Increase $135,000 B. Increase $270,000 O C. Increase $90,000 D. Decrease $90,000
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