Question: Please answer with clear work Top Hats Inc. has two product lines -baseball helmets and football helmets, The income statement data for this year is

Please answer with clear work Top Hats Inc. has two product linesPlease answer with clear work

Top Hats Inc. has two product lines -baseball helmets and football helmets, The income statement data for this year is Baseball Helmets $500,000 (250,000) $250,000 (90,000) Football Helmets Total $350,000 (280,000) $70,000 (90,000) $(20,000) $850,000 (530,000) $320,000 (180,000) $140,000 Sales Revenue Variable Costs Contribution Margin Fixed Costs Operating income (loss)$160,000 6.The firm might drop the football helmets line, which would reduce the costs by $50,000.How would the firm's operating income be affected if football helmets are dropped? a. Operating income will increase by $50,000 b. Operating income will decrease by $70,000 c. Operating income will increase by $20,000 d. Operating income will decrease by $20,000 If Top Hat's total fixed costs remain unchanged, but the space formerly used produce the football helmets could be rented to another firm for $100,000 per year, how would dropping football helmets affect operating income? A. Operating income will increase by $30,000 B. Operating income will increase by $10,000 C. Operating income will decrease by $10,000 D. Operating income will decrease by $80,000

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!