Crash Sports, Inc. has two product

lineslong dash—batting

helmets and football helmets. The income statement data for the most recent year is as follows:

	Total	Batting Helmets	Football Helmets
Sales revenue	$1,050,000	$700,000	$350,000
Variable costs	(430,000)	(150,000)	(280,000)
Contribution margin	$620,000	$550,000	$70,000
Fixed costs	(180,000)	(90,000)	(90,000)
Operating income (loss)	$440,000	$460,000	($20,000)

If $50,000 of fixed costs will be eliminated by dropping the football helmets line, how will dropping football helmets affect operating income of the company?

Answer rating: 100% (QA)

solution Relevant profit Loss from Foo... View the full answer