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Protector, Inc. has two product linesbatting helmets and football helmets. The income statement data for the most recent year is as follows: Sales revenue Variable
Protector, Inc. has two product linesbatting 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 $1,020,000 (480,000) $540,000 (160,000) $380,000 Batting Helmets $700,000 (200,000) $500,000 .(70,000) $430,000 Football Helmets $320,000 (280,000) $40,000 .(90,000) $(50,000) 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? A. Operating income will rease by $40,000. B. Operating income will increase by $60,000. C. Operating income will increase by $40,000. D. Operating income will decrease by $60,000
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