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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 expenses
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 $490,000 375,000 115,000 78.000 $37,000 Hiking $350,000 255,000 95.000 39,000 $56,000 Fashion $140,000 120.000 20,000 39.000 S(19,000) If $30,000 of fixed costs will be eliminated by discontinuing the Fashion line, how will operating income be affected? O A. Decrease $46,000 OB. Increase $44,000 O C. Increase $81,000 OD. Increase $10,000
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