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Rainbow Brothers Inc. has two product lines: Rain coats and Snow boots. The following is data on its Income statement for the most recent
Rainbow Brothers Inc. has two product lines: Rain coats and Snow boots. The following is data on its Income statement for the most recent year: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $500,000 395,000 105,000 79,000 $26,000 Rain Coats Snow Boots $360,000 $140,000 275,000 120,000 85,000 20,000 39,500 39,500 $45,500 $(19,500) If $29,000 of fixed costs will be eliminated by discontinuing the Snow Boots line, how will operating income be affected? OA. Decrease $45,500 B. Increase $32,000 OC. Increase $9,000 O O OD. Increase $58,000 MacBook Air 20 900 000 GA esc F3 FA FS F6 F7 F1 F2
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