The income statement for Lovely Locks is divided by its two product ines, Curling bons and Straighteners, as followsStraightenersCurting Irons$640,000$200,000$470,000$210.000$170,000$75.000$90,000Sales revenueVariable expensesContribution marginFood expensesOperating income (loss)$50.000$75,000$(25000)A. Increase in total operating income of $113,500B. Increase in total operating income of $43,500C. Decrease in total operating income of $43.500D. Decrease in total operating income of $113,500.Total1000,0005000 000$220.000$150,000$70,000If Lovely Locks can eliminate fixed costs of $35,000 and increase the sale of Curting troms by 6.500 units at a selling price of 5327 perunit and a contribution margin of $0 per unit, then discontinuing the Straighteners should result in which of the towing?

Discontinuation of any segment is based on contribution margin lost and avoidable costs of that…

riable expenses intribution margin ed expenses perating income (los) Curling Irons $040,000 $470,000 $170.000 $75.000 100.000 Straighteners $200.000 $210.000 $00.000 $75,000 $25.000) Total $000.000 $600 000 $220 000 $150 000 $70,000 Lovely Locks can eliminate fxed costs of $35,000 and increase the sale of Curling trons by 6,500 unts at a seling price of t it and a contribution margin of 50 per unit, then discontinuing the straighteners should result in which of the towing

riable expenses intribution margin ed expenses perating income (los) Curling Irons $040,000 $470,000 $170.000 $75.000 100.000 Straighteners $200.000 $210.000 $00.000 $75,000 $25.000) Total $000.000 $600 000 $220 000 $150 000 $70,000 Lovely Locks can eliminate fxed costs of $35,000 and increase the sale of Curling trons by 6,500 unts at a seling price of t it and a contribution margin of 50 per unit, then discontinuing the straighteners should result in which of the towing

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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