Question: 2.5 p Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: Sales revenue Variable

2.5 p Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Totall $480,000 355.000 125,000 76,000 $49,000 Hiking $340,000 235,000 105,000 38,000 $67.000 Fashion $140,000 120.000 20,000 38,000 $(18,000) Assuming the Fashion line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $10,000 per year, how will operating income be affected? Decrease $10,000 Increase $ 162,000 Increase $30,000 Increase $10,000
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
