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stasp1201 stasp1201
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8 years ago
Boots plus has two product lines: Hiking boots and Fashion boots.Income statement data for the most recent year :
               total         hiking      fashion
Sales revenue         480,000      340,000      140,000
variable expenses      355,000      235,000      120,000
               _________________________________
contribution margin      125,000      105,000      20,000
fixed expenses      76,000      38,000      38,000
               __________________________________
operating income(loss)   49,000      67,000      (18,000)

assuming fixed costs remain unchanged, how would discontinuing the fashion line affect operating income?

A. Decrease in total operating income of 20,000$
B. Increase in total operating income of 29,000$
C. Increase in total operating income of 132,000$
D. Decrease in total operating income of 78,000$
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Educator
8 years ago
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