QUESTION 4 Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Tota Luxury Sporty Sales revenue $490,000 $360,000 $130,000 Variable expenses 362,000 235,000 127,000 Contribution margin 128,000 125,000 3,000 Fixed expenses 76,000 38,000 38,000 Operating income (loss) $52,000 $87,000 $35,000 Assuming fixed costs remain unchanged, how would discontinuing the Sporty line affect operating income? Increase in total operating income of $49,000 Decrease in total operating income of $128,000 O Increase in total operating income of $130,000 O Decrease in total operating income of $3,000 QUESTION 5 Fresco Appliances manufactures two products: Food Processors and Espresso Machines. The following data are available: Food Processors Espresso Makers Sales price $135 $245 Variable costs $90 $180 The company can manufacture two food processors per machine hour and three espresso machines per machine hour. The company's production capacity is 1,200 machine hours per month. What is the contribution margin per machine hour for espresso machines? O $195 $90 $65 $675