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The income statement for Germain Appliances is divided by its two product lines. Toasters and Microwaves, as follows: Toaster Microwave Total Sales revenue S640,000 $255,000
The income statement for Germain Appliances is divided by its two product lines. Toasters and Microwaves, as follows: Toaster Microwave Total Sales revenue S640,000 $255,000 $895,000 Variable expenses $470,000 $210,000 $680,000 Contribution margin $170,000 $45,000 $215,000 Fixed expenses $80,000 $80,000 $160,000 Operating income (loss) $90,000 -$35,000 $55,000 If fixed costs remain unchanged and Germain Appliances discontinues the Microwave line, how will operating income change? Will increase by $45,000 Will decrease by $160,000 Will decrease by $45,000 Will increase by $160,000
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