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Westfall Watches Has Two Product Lines: Luxury Watches and Sporty

Question 217

Multiple Choice

Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Assuming the Sporty line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $32,000 per year, how will operating income be affected? A) Increase $22,000 B) Increase $174,000 C) Decrease $22,000 D) Increase $81,000 Assuming the Sporty line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $32,000 per year, how will operating income be affected?


A) Increase $22,000
B) Increase $174,000
C) Decrease $22,000
D) Increase $81,000

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