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The income statement for Orange Company is divided by its two product lines, juice and fruit, as follows: Sales revenue Variable costs Juice Fruit Total
The income statement for Orange Company is divided by its two product lines, juice and fruit, as follows: Sales revenue Variable costs Juice Fruit Total $640,000 $300,000 $940,000 (445,000)|(240,000)(685,000) $195,000 $60,000 $255,000 (74,000) (74,000)|(148,000) Contribution margin Fixed costs Operating income (loss) $121,000 $(14,000) $107,000 Orange Company is considering eliminating the fruit product line. If this line is eliminated, Orange Company will be able to eliminate $72,000 of total fixed costs. By how much would this business decision increase operating income? O $72,000 O $12,000 O $60,000 O $134,000
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