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Lantern Company has three product lines: D, E, and F. The following information is available: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income
Lantern Company has three product lines: D, E, and F. The following information is available: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) D $85,000 $42,000 $43,000 $12.000 $31,000 E $42.000 $24,000 $18,000 $15,000 $3,000 F $20,000 $12,000 $8,000 $17.000 $(9,000) Lantern Company is thinking of discontinuing product line F because it is reporting an operating loss. All fixed costs are unavoidable. Assuming Lantern Company discontinues line F and is able to double the production and sales of product line E without increasing fixed costs. What affect will this have on operating income? . O A. Decrease $10,000 OB. Increase $35,000 O C. Increase $34.000 OD. Increase $10,000
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