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Protector, Inc. has two product lines-batting helmets and football helmets. The income statement data for the most recent year is as follows: Sales revenue
Protector, Inc. has two product lines-batting helmets and football helmets. The income statement data for the most recent year is as follows: Sales revenue Variable costs Contribution margin Fixed costs Operating income (loss) Total $920,000 (430,000) $490,000 (172,000) $318,000 Batting Helmets $600,000 (150,000) $450,000 (80,000) $370,000 Football Helmets $320,000 (280,000) $40,000 (92,000) $(52,000) Assuming the football helmets line is dropped, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $100,000 per year, how will operating income be affected? OA. Operating income will decrease by $40,000. OB. Operating income will decrease by $60,000. OC. Operating income will increase by $40,000. OD. Operating income will increase by $60,000.
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