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Pet Food Inc. has two product lines: Cat food and Dog food. Contribution margin income statement data for the most recent year follow: Total Cat
Pet Food Inc. has two product lines: Cat food and Dog food. Contribution margin income statement data for the most recent year follow:
Total | Cat Food | Dog Food | |
Sales revenue | $ 385 comma 000 |
$ 300 comma 000
$85,000 | |
Variable expenses | $ 63 comma 000 |
$ 23 comma 000
$40,000 | |
Contribution margin | $ 322 comma 000 |
$ 277 comma 000
$45,000 | |
Fixed expenses | $ 101 comma 000 |
$ 49 comma 000
$52,000 | |
Operating income (loss) | $ 221 comma 000 |
$ 228 comma 000
$(7,000) |
Assuming total fixed costs remain unchanged, how would discontinuing the Dog food line affect operating income?
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