Crash Sports, Inc. has two product lines-batting helmets and football helmets. The income statement data for...

Transcribed Image Text:

Crash Sports, 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 $1,060,000 $700,000 $360,000 (290,000) $70,000 (490,000) $570,000 (180,000) $390,000 (200,000) $500,000 Variable costs Contribution margin Fixed costs (80,000) $420,000 (100,000) S(30,000) Operating income (loss) If $10,000 of fixed costs will be eliminated by dropping the football helmets line, how will dropping football helmets affect operating income of the company? A. Operating income will decrease by S60,000. B. Operating income will decrease by $100,000. Oc. Operating income will increase by $10,000. O D. Operating income will increase by S70,000. Crash Sports, 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 $1,060,000 $700,000 $360,000 (290,000) $70,000 (490,000) $570,000 (180,000) $390,000 (200,000) $500,000 Variable costs Contribution margin Fixed costs (80,000) $420,000 (100,000) S(30,000) Operating income (loss) If $10,000 of fixed costs will be eliminated by dropping the football helmets line, how will dropping football helmets affect operating income of the company? A. Operating income will decrease by S60,000. B. Operating income will decrease by $100,000. Oc. Operating income will increase by $10,000. O D. Operating income will increase by S70,000.

Answer rating: 100% (QA)

Answer Option A Operating income will decrease by 60000 if foo... View the full answer