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Sole Sisters Company has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow Sales revenue Variable
Sole Sisters Company has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $530,000 Hiking $390,000 Fashion $140,000 365,000 245,000 120,000 165,000 145,000 20,000 77,000 $88,000 38,500 $106,500 38,500 $(18,500) Assuming the Fashion line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $25,000 per year, how will operating income be affected? OA. Decrease $5,000 OB. Increase $5,000 OC. Increase $93,000 OD. Increase $181,000
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