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 S60,000. O D. Operating income will decrease by $340,000.

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 S60,000. O D. Operating income will decrease by $340,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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