K Ace Parts and Supply makes a variety of car parts. The company produces 6,500 A90 parts each year. Each A90 sells for $11 and has a contribution margin of $1. Currently, $16,400 of fixed manufacturing overhead is allocated to the A90 product line. If Ace Parts and Supply discontinues the A90 product line, $7,100 of fixed manufacturing overhead costs would be avoided. What would be the impact on total operating income if the A90 product line were to be discontinued? OA. Increase in total operating income of $600 OB. Increase in total operating income of $2,800 OC. Decrease in total operating income of $2,800 OD. Decrease in total operating income of $600

K Ace Parts and Supply makes a variety of car parts. The company produces 6,500 A90 parts each year. Each A90 sells for $11 and has a contribution margin of $1. Currently, $16,400 of fixed manufacturing overhead is allocated to the A90 product line. If Ace Parts and Supply discontinues the A90 product line, $7,100 of fixed manufacturing overhead costs would be avoided. What would be the impact on total operating income if the A90 product line were to be discontinued? OA. Increase in total operating income of $600 OB. Increase in total operating income of $2,800 OC. Decrease in total operating income of $2,800 OD. Decrease in total operating income of $600

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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