Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent yearfollow:Sales revenueVariable expensesContribution marginFixed expensesOperating income (loss)OA. Increase $275,0000 0 0 0Assuming the Fashion line is discontinued, total fixed costs remain unchanged, and the space formerly used toproduce the Fashion line is used to increase the production of Hiking boots to 250% of the current production, howwill operating income be affected?Increase $211,500OC. Increase $152,500OB.TotalHiking$530,000 $390,000$395,000 275,000135,00076,000$59,000D. Decrease $152,500115,00038,000$77,000Fashion$140,000120,00020,00038,000$(18,000)

Net Operating Income (NOI) is a financial statistic used in business and real estate to determine…

Answered: es revenue iable expenses ntribution…

es revenue iable expenses ntribution margin ced expenses oro Total Hiking $530,000 $390,000 $395,000 275,000 135,000 115,000 76,000 38,000 650.000 633 Fashion $140,000 120,000 20,000 38,000

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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Question

Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year
follow:
Sales revenue
Variable expenses
Contribution margin
Fixed expenses
Operating income (loss)
OA. Increase $275,000
0 0 0 0
Assuming the Fashion line is discontinued, total fixed costs remain unchanged, and the space formerly used to
produce the Fashion line is used to increase the production of Hiking boots to 250% of the current production, how
will operating income be affected?
Increase $211,500
OC. Increase $152,500
OB.
Total
Hiking
$530,000 $390,000
$395,000 275,000
135,000
76,000
$59,000
D. Decrease $152,500
115,000
38,000
$77,000
Fashion
$140,000
120,000
20,000
38,000
$(18,000)

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