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Supsose K-Log is considering discontinuing its fruity rings product line. Assume that during the past yesr, the fruity rings' product line income statement showed the
Supsose K-Log is considering discontinuing its fruity rings product line. Assume that during the past yesr, the fruity rings' product line income statement showed the following: (Cllck the icon to wiew the inoome statement dati.) (Cilick the icon for additional intormation.) If the company decides to diecontinue the product line, what wil happen to the company's operating income? Shoula K-Log discontinue the truity rings product line? More info Fixed manulacturing overnead costs account for 40% of the cost of goods, while orly 30% of the operating expenses are fixed. Since the fruily rings line is just one of the company's cereal cperations, only S725,000 of direct fixed costs ithe majority of which is advertising) will be eliminated if the product ine is tiscontinued. The remainder of the fixed costs wil stil be incurred by the company. Data table
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