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We-Got-Boots Company has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: Sales revenue Variable expenses
We-Got-Boots Company has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $510,000 355,000 155,000 Hiking $370,000 Fashion $140,000 235,000 120,000 135,000 20,000 81,000 $74,000 40,500 40,500 $94,500 -$20,500 If $30,000 of fixed costs will be eliminated by discontinuing the Fashion line, how will operating income be affected? O Increase $10,000 O Increase $155,000 O Decrease $47,500 O Increase $81,000
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