Question
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 $480,000 Hiking $340,000 Fashion $140,000 354,000 235,000 119,000 126,000 105,000 21,000 76,000 38,000 38,000 $50,000 $67,000 $(17,000) Assuming fixed costs remain unchanged, how would discontinuing the Fashion line affect operating income? A. Increase in total operating income of $29,000 B. Decrease in total operating income of $140,000 C. Increase in total operating income of $126,000 D. Decrease in total operating income of $21,000
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