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Home Q & A Board Other Fields Homework Help Business Accounting
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CJODAS CJODAS
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5 years ago
Macaulay Roller Skates has three product linesD, E, and F. The following information is available:

DEF
Sales revenue$80,000$40,000$31,000
Variable costs(40,000)(10,000)(12,000)
Contribution margin$40,000$30,000$19,000
Fixed costs(20,000)(10,000)(25,000)
Operating income (loss)$20,000$20,000$(6,000)

The company is deciding whether to drop product line F because it has an operating loss. Assuming fixed costs are unavoidable, if Macaulay drops product line F and does not replace it, what effect will this have on operating income?
A) Operating income will increase $6,000.
B) Operating income will increase $19,000.
C) Operating income will increase $25,000.
D) Operating income will decrease $19,000.
Textbook 
Horngren's Accounting

Horngren's Accounting


Edition: 11th
Authors:
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jloper25jloper25
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5 years ago
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CJODAS Author
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#2
5 years ago
TY!
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5 years ago
You're welcome
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