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The income statement for Orange Company is divided by its two product lines, juice and fruit, as follows: Juice Fruit Total Sales revenue Variable
The income statement for Orange Company is divided by its two product lines, juice and fruit, as follows: Juice Fruit Total Sales revenue Variable costs $630,000 $298,000 $928,000 (455,000) (240,000) (695,000) Contribution margin $175,000 $58,000 $233,000 Fixed costs (75,000) (74,000) (149,000) Operating income $100,000 $(16,000) $84,000 (loss) Orange Company is considering eliminating the fruit product line. If this line is eliminated, Orange Company will be able to eliminate $73,000 of total fixed costs. By how much would this business decision increase operating income? O $73,000 O $58,000 O $132,000 O $15,000
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