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 Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $510,000 355,000 155,000 76,000 $79.000 Luxury $380,000 $235,000 145,000 38,000 $107.000 Sporty $130,000 120,000 10,000 38.000 $(28,000) Assuming the Sporty line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $32,000 per year, how will operating income be affected? O A. Decrease $22,000 OB. Increase $101,000 OC. Increase $22,000 OD. Increase $214,000
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