Homework Help is Here – Start Your Trial Now!
Business
Accounting
Motion Rollerblades has three product lines-D, E, and F. The following information is available: E $60,000 (5,000) $55,000 Sales revenue Variable costs Contribution margin Fixed costs Operating income (loss) $90,000 (40,000) $50,000 OA. Operating income will increase $6,000. OB. Operating income will increase $18,000. OC. Operating income will increase $24,000. OD. Operating income will decrease $18,000. (15,000) $35,000 (15,000) $40,000 F $30,000 (12,000) $18,000 (24,000) $(6,000) The company is deciding whether to drop product line F because it has an operating loss. Assuming fixed costs are unavoidable, if Motion drops product line F and does not replace it, what effect will this have on operating income?

Motion Rollerblades has three product lines-D, E, and F. The following information is available: E $60,000 (5,000) $55,000 Sales revenue Variable costs Contribution margin Fixed costs Operating income (loss) $90,000 (40,000) $50,000 OA. Operating income will increase $6,000. OB. Operating income will increase $18,000. OC. Operating income will increase $24,000. OD. Operating income will decrease $18,000. (15,000) $35,000 (15,000) $40,000 F $30,000 (12,000) $18,000 (24,000) $(6,000) The company is deciding whether to drop product line F because it has an operating loss. Assuming fixed costs are unavoidable, if Motion drops product line F and does not replace it, what effect will this have on operating income?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question

Accouting

 

Motion Rollerblades has three product lines-D, E, and F. The following information is available: D E $60,000 $90,000 (40,000) (5,000) $50,000 $55,000 (15,000) $40,000 Sales revenue Variable costs Contribution margin Fixed costs Operating income (loss) O A. Operating income will increase $6,000. B. Operating income will increase $18,000. (15,000) $35,000 C. Operating income will increase $24,000. OD. Operating income will decrease $18,000. F $30,000 (12,000) $18,000 The company is deciding whether to drop product line F because it has an operating loss. Assuming fixed costs are unavoidable, if Motion drops product line F and does not replace it, what effect will this have on operating income? (24,000) $(6,000)
Transcribed Image Text:Motion Rollerblades has three product lines-D, E, and F. The following information is available: D E $60,000 $90,000 (40,000) (5,000) $50,000 $55,000 (15,000) $40,000 Sales revenue Variable costs Contribution margin Fixed costs Operating income (loss) O A. Operating income will increase $6,000. B. Operating income will increase $18,000. (15,000) $35,000 C. Operating income will increase $24,000. OD. Operating income will decrease $18,000. F $30,000 (12,000) $18,000 The company is deciding whether to drop product line F because it has an operating loss. Assuming fixed costs are unavoidable, if Motion drops product line F and does not replace it, what effect will this have on operating income? (24,000) $(6,000)
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS