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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 $480,000 Hiking $340,000 Fashion $140,000 364,000 235,000 129,000 116,000 105,000 11,000 76,000 38,000 38,000 $40,000 $67,000 $(27,000) 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 $11,000 C. Decrease in total operating income of $140,000 D. Increase in total operating income of $116,000
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