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

Question 151

Multiple Choice

Cambridge Roller Skates has three product lines-D,E,and F.The following information is available:
Cambridge 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.Assume that $21,000 of total fixed costs could be eliminated by dropping F.What effect would this decision have on operating income? A) Operating income will increase by $23,000. B) Operating income will increase by $1,000. C) Operating income will decrease by $23,000. D) Operating income will decrease by $1,000.
The company is deciding whether to drop product line F because it has an operating loss.Assume that $21,000 of total fixed costs could be eliminated by dropping F.What effect would this decision have on operating income?


A) Operating income will increase by $23,000.
B) Operating income will increase by $1,000.
C) Operating income will decrease by $23,000.
D) Operating income will decrease by $1,000.

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