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7 years ago
Rocca Hats, Inc. has two product lines - batting helmets and football helmets. The income statement data for the most recent year is as follows:

   Total   Batting Helmets   Football Helmets
Sales revenue   $940,000   $600,000   $340,000
Variable costs   (430,000)   (150,000)   (280,000)
Contribution margin   $510,000   $450,000   $60,000
Fixed costs   (180,000)   (90,000)   (90,000)
Operating income (loss)   $330,000   $360,000   $(30,000)

Assuming the football helmet line is dropped, total fixed costs remain unchanged, and the space formerly used to produce the football helmet line is used to double the production of batting helmets, operating income will be ________.
A) $720,000
B) $360,000
C) $180,000
D) $450,000
Textbook 
Horngren's Financial & Managerial Accounting, The Financial Chapters

Horngren's Financial & Managerial Accounting, The Financial Chapters


Edition: 5th
Authors:
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Mrgo-breedMrgo-breed
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Deprecated Author
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#2
7 years ago
Makes perfect sense, thx
wrote...
#3
7 years ago
Happy to help Smiling Face with Open Mouth
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#4
3 years ago
thank you
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