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Michael's Hats,Inc

Question 144

Multiple Choice

Michael's Hats,Inc.has two product lines-batting helmets and football helmets.The income statement data for the most recent year is as follows:
Michael's Hats,Inc.has two product lines-batting helmets and football helmets.The income statement data for the most recent year is as follows: If $90,000 of fixed costs will be eliminated by dropping the football helmets line,how will dropping football helmets affect operating income of the company? A) Operating income will increase by $90,000. B) Operating income will increase by $120,000. C) Operating income will decrease by $150,000. D) Operating income will decrease by $30,000.
If $90,000 of fixed costs will be eliminated by dropping the football helmets line,how will dropping football helmets affect operating income of the company?


A) Operating income will increase by $90,000.
B) Operating income will increase by $120,000.
C) Operating income will decrease by $150,000.
D) Operating income will decrease by $30,000.

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