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Westfall Watches Has Two Product Lines: Luxury Watches and Sporty

Question 150

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 $30,000 per year, how will operating income be affected? A) Increase $20,000 B) Increase $230,000 C) Decrease $20,000 D) Increase $105,000 Assuming the Sporty line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $30,000 per year, how will operating income be affected?


A) Increase $20,000
B) Increase $230,000
C) Decrease $20,000
D) Increase $105,000

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