The Income Statement for Germain Appliances Is Divided by Its

The income statement for Germain Appliances is divided by its two product lines, Toasters and Microwaves, as follows: If Germain Appliances can eliminate fixed costs of $32,000 and increase the sale of Toasters by 6,000 units at a selling price of $30 per unit and a contribution margin of $8 per unit, then discontinuing the Microwaves should result in which of the following?

A) Increase in total operating income of $35,000
B) Increase in total operating income of $3,000
C) Decrease in total operating income of $35,000
D) Decrease in total operating income of $3,000

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free