Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for...
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Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Total Luxury Sporty Sales revenue $490,000 $360,000 $130,000 Variable expenses 362,000 235,000 127,000 in Contribution margin 128,000 125,000 3,000 Fixed expenses 76,000 38,000 38,000 ig Operating income (loss) $52,000 $87.000 S(35,000) Assuming fixed costs remain unchanged, how would discontinuing the Sporty line affect operating income? . A. Increase in total operating income of $49,000 B. Decrease in total operating income of $3,000 C. Increase in total operating income of $130,000 D. Decrease in total operating income of $128,000
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