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SusEnergy has two power generator lines: Solar and Gas generators. Income statement data for the most recent year follow: Total Solar Gas Sales revenue $490,000
SusEnergy has two power generator lines: Solar and Gas generators. Income statement data for the most recent year follow: Total Solar Gas Sales revenue $490,000 $350,000 $140,000 Variable expenses 365,000 245,000 120,000 Contribution margin 125,000 105,000 20,000 Fixed expenses 79,000 39,500 39,500 Operating income (loss) $46,000 $65,500 $(19,500) Assuming the Gas 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? A. Increase $5,000 B. Decrease $5,000 C. Increase $97,000 D. Increase $51,000
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