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K Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow Sales revenue Variable
K Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total Hiking Fashion $520,000 $380,000 $140,000 385,000 265,000 120,000 135,000 115,000 20,000 79,000 39,500 39,500 $56,000 $75,500 $(19,500) If $26,000 of fixed costs will be eliminated by discontinuing the Fashion line, how will operating income be affected? OA. Increase $6,000 OB. Increase $62,000 OC. Increase $118,000 D. Decrease $45,500
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