Sole Sisters Company has two product lines: Hiking boots and Fashion boots. Income statement data for...

Transcribed Image Text:

Sole Sisters Company has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: Total $480,000 385,000 95,000 79,000 $16,000 Hiking Fashion $340,000 $140,000 265,000 120,000 75,000 20,000 Fixed expenses 39,500 39,500 Operating income (loss) $35,500 $(19,500) If $26,000 of fixed costs will be eliminated by discontinuing the Fashion line, how will operating income be affected? Sales revenue Variable expenses Contribution margin Sole Sisters Company has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: Total $480,000 385,000 95,000 79,000 $16,000 Hiking Fashion $340,000 $140,000 265,000 120,000 75,000 20,000 Fixed expenses 39,500 39,500 Operating income (loss) $35,500 $(19,500) If $26,000 of fixed costs will be eliminated by discontinuing the Fashion line, how will operating income be affected? Sales revenue Variable expenses Contribution margin

Answer rating: 100% (QA)

If Sole Sisters Company discontinues the Fashion line and eliminates 26000 of fixed costs ... View the full answer