Question
Faros Hats inc has two product lines batting helmets and foodball helmets. the income statement data for most recent year is as follow: Total. batting
Faros Hats inc has two product lines batting helmets and foodball helmets. the income statement data for most recent year is as follow:
Total. batting helmet. foodball helmet
Sale revenue $850,000. $500,000 $350,000
Variable cost. $(440,000). $(150,000). $(290,000
Contribution. $410,000. $350,000. $60,000
Fix cost. $(190,000). $(90,000). $(100,000)
Operating income $220,000 $260,000. $40,000
what is the effect of dropping foodball helmets line of the operating income of the company. Assumed that fix cost remain unchange and that there would be no advance effect on other sales.
A. operating income will decrease by $60,000
B. operating income will decrease by $350,000
C. operating income will increase by $90,000
D. operating income will increase by $40,000
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