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OOOO Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Sales revenue Variable expenses
OOOO Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $490,000 Luxury $360,000 Sporty $130,000 359,000 235,000 124,000 131,000 125,000 6,000 76,000 38,000 38,000 $55,000 $87,000 $(32,000) Assuming fixed costs remain unchanged, how would discontinuing the Sporty line affect operating income? A. Increase in total operating income of $49,000 OB. Decrease in total operating income of $6,000 C. Decrease in total operating income of $131,000 OD. Increase in total operating income of $130,000
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