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Oriolelndustries manufactures light fixtures for home, retail, and industrial customers. The retail line has been showing losses for several years, and management is considering dropping
Oriolelndustries manufactures light fixtures for home, retail, and industrial customers. The retail line has been showing losses for several years, and management is considering dropping the line. Recent income statements have been very similar to the following information which was prepared for the most recent year: Home Retail Industrial Total Sales $551600 $321600 $831600 $1704800 Variable costs 358900 218900 682400 1260200 192700 102700 149200 444600 Contribution margin Fixed costs 126600 131600 116600 374800 Operating income $66100 $(28900) $32600 $69800 Of the fixed costs, $319800 of it is common costs that have been allocated equally to each product line. What will total operating income be if Oriole drops the retail line? O $(7900) O $22100 O $98700 O $77700
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