Armor Sports, Inc. has two product lines-batting helmets and football helmets. The income statement data for the most recent year isas follows:Sales revenueVariable costsContribution marginFixed costsOperating income (loss)Total$940,000(540,000)$400,000(200,000)$200,000Batting Helmets$600,000(250,000)$350,000OA. Operating income will increase by $60,000.OB. Operating income will increase by $90,000.OC. Operating income will decrease by $340,000.D. Operating income will decrease by $50,000.(90,000)$260,000Football Helmets$340,000(290,000)$50,000(110,000)$(60,000)What is the effect of dropping football helmets line on the operating income of the company? (Assume that fixed costs remainunchanged and that there would be no adverse effect on other sales.)

ANSWER Here in this question Armor sports has two product line such as Batting helmets and foot ball…

Armor Sports, Inc. has two product lines-batting helmets and football helmets. The income statement data for the most recent year is as follows: Sales revenue Variable costs Contribution margin Fixed costs Operating income (loss) Total $940,000 (540,000) $400,000 (200,000) $200,000 Batting Helmets $600,000 (250,000) $350,000 (90,000) $260,000 A. Operating income will increase by $60,000. B. Operating income will increase by $90,000. OC. Operating income will decrease by $340,000. OD. Operating income will decrease by $50,000. Football Helmets $340,000 (290,000) $50,000 (110,000) $(60,000) What is the effect of dropping football helmets line on the operating income of the company? (Assume that fixed costs remain unchanged and that there would be no adverse effect on other sales.)

Armor Sports, Inc. has two product lines-batting helmets and football helmets. The income statement data for the most recent year is as follows: Sales revenue Variable costs Contribution margin Fixed costs Operating income (loss) Total $940,000 (540,000) $400,000 (200,000) $200,000 Batting Helmets $600,000 (250,000) $350,000 (90,000) $260,000 A. Operating income will increase by $60,000. B. Operating income will increase by $90,000. OC. Operating income will decrease by $340,000. OD. Operating income will decrease by $50,000. Football Helmets $340,000 (290,000) $50,000 (110,000) $(60,000) What is the effect of dropping football helmets line on the operating income of the company? (Assume that fixed costs remain unchanged and that there would be no adverse effect on other sales.)

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter5: Activity-based Costing And Management

Section: Chapter Questions

Problem 16MCQ: Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000...

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Armor Sports, Inc. has two product lines-batting helmets and football helmets. The income statement data for the most recent year is as follows: Batting Helmets $700,000 (150,000) Total Football Helmets Sales revenue $1,040,000 (430,000) $610,000 (180,000) $430.000 $340,000 (280.000) $60.000 Variable costs Contribution margin Fixed costs $550,000 (90,000) (90 000) ($30,000) Operating income (loss) $460,000 What is the effect of dropping football helmets line on the operating income of the company? (Assume that fixed costs remain unchanged and that there would be no adverse effect on other sales.) O A. Operating income will increase by $90,000. O B. Operating income will increase by $30,000. O C. Operating income will decrease by $60,000. O D. Operating income will decrease by $340,000.
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