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The income statement for Germain Appliances is divided by its two product lines, Toasters and Microwaves, as follows: Sales revenue Variable expenses Contribution margin Fixed
The income statement for Germain Appliances is divided by its two product lines, Toasters and Microwaves, as follows: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Toaster $630,000 $450.000 $180,000 $75,000 $105,000 Microwave $255,000 $210.000 $45,000 $75,000 $(30,000) Total $885,000 $660.000 $225,000 $150,000 $75,000 If Germain Appliances can eliminate fixed costs of $33,000 and increase the sale of Toasters by 6,100 units at a selling price of $35 per unit and a contribution margin of $12 per unit, then discontinuing the Microwaves should result in which of the following? O A. Decrease in total operating income of $61,200 OB. Increase in total operating income of $61,200 O C. Decrease in total operating income of $28,200 OD. Increase in total operating income of $28,200
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