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The income statement for Wake Me Up Appliances is divided by its two product lines, Toasters and Coffee Machine, as follows: Toaster Coffee Machine Total
The income statement for Wake Me Up Appliances is divided by its two product lines, Toasters and Coffee Machine, as follows: Toaster Coffee Machine Total Sales revenue $630,000 $255,000 $885,000 Variable expenses $460,000 $210,000 $670,000 Contribution margin $170,000 $45,000 $215,000 Fixed expenses $75,000 $75,000 $150,000 Operating income (loss) $95,000 ($30,000) $65,000 If Wake Me Up Appliances can eliminate fixed costs of $32,000 by discontinuing the Coffee Machine line, then discontinuing it should result in which of the following? O A. Increase in total operating income of $65,000 B. Decrease in total operating income of $65,000 C. Decrease in total operating income of $13,000 D. Increase in total operating income of $13,000
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