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Westfall Watches Has Two Product Lines: Luxury Watches and Sporty

Question 98

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: If $22,000 of fixed costs will be eliminated by discontinuing the Sporty line, how will operating income be affected? A) Decrease $32,000 B) Increase $12,000 C) Increase $7000 D) Increase $90,000 If $22,000 of fixed costs will be eliminated by discontinuing the Sporty line, how will operating income be affected?


A) Decrease $32,000
B) Increase $12,000
C) Increase $7000
D) Increase $90,000

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