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Crash Sports, Inc. has two product linesbatting helmets and football helmets. The income statement data for the most recent year is as follows: Total Batting
Crash Sports, Inc. has two product linesbatting helmets and football helmets. The income statement data for the most recent year is as follows: Total Batting Helmets Football Helmets Sales revenue $1,060,000 $700,000 $360,000 Variable costs (490,000) (200,000) (290,000) Contribution margin $570,000 $500,000 $70,000 Fixed costs (180,000) (80,000) (100,000) Operating income (loss) $390,000 $420,000 S(30,000) If $10,000 of fixed costs will be eliminated by dropping the football helmets line, how will dropping football helmets affect operating income of the company? A. Operating income will decrease by 560,000. B. Operating income will decrease by $100,000 OC. Operating income will increase by $10,000. OD. Operating income will increase by $70,000
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