Macaulay Roller Skates Has Three Product Lines-D,E,and F

Macaulay Roller Skates has three product lines-D,E,and F.The following information is available:

The company is deciding whether to drop product line F because it has an operating loss.Assuming fixed costs are unavoidable,if Macaulay drops product line F and does not replace it,what effect will this have on operating income?

A) Operating income will increase $6,000.
B) Operating income will increase $19,000.
C) Operating income will increase $25,000.
D) Operating income will decrease $19,000.

Correct Answer:

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