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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: Sales revenue
Crash Sports, Inc. has two product linesbatting helmets and football helmets. The income statement data for the most recent year is as follows: Sales revenue Variable costs Contribution margin Fixed costs Operating income (loss) Total $850,000 (430,000) $420,000 (170,000) $250,000 Batting Helmets $500,000 (150,000) $350,000 (80,000) $270,000 Football Helmets $350,000 (280,000) $70,000 (90,000) $(20,000) If $50,000 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 increase by $70,000. B. Operating income will increase by $50,000. O C. Operating income will decrease by $20,000. OD. Operating income will decrease by $90,000. Click to select your
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