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K Armor Sports, Inc. has two product lines batting helmets and football helmets. The income statement data for the most recent year is as follows:
K Armor Sports, Inc. has two product lines batting helmets and football helmets. The income statement data for the most recent year is as follows: Football Helmets Batting Helmets $600,000 Sales revenue $330,000 Variable costs (250,000) (290,000) Contribution margin $350,000 $40,000 Fixed costs (90,000) (90,000) Operating income (loss) $260,000 $(50,000) What is the effect of dropping football helmets line on the operating income of the company? (Assume that fixed costs remain unchanged and that there would be no adverse effect on other sales.) Total $930,000 (540,000) $390,000 (180,000) $210,000 OA. Operating income will increase by $50,000. OB. Operating income will decrease by $40,000. OC. Operating income will decrease by $330,000. OD. Operating income will increase by $90,000. CID
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