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The income statement for Germain Appliances is divided by its two product lines, Toasters and Microwaves, as follows: The income statement for Germain Appliances is
The income statement for Germain Appliances is divided by its two product lines, Toasters and Microwaves, as follows:
The income statement for Germain Appliances is divided by its two product lines, Toasters and Microwaves, as follows Toaster Total Microwave Sales revenue $640,000 $255,000 $895,000 680,000 $470,000 $210,000 Variable expenses 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? O A. Will decrease by $45,000 O B. Will increase by $45,000 C. Will decrease by $160,000 O D. Will increase by $160,000Step by Step Solution
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