Faros Hats, Etc

question 124

Multiple Choice

Faros Hats, Etc. has two product lines-baseball helmets and football helmets. Income statement data for the most recent year follow: If $50,000 of fixed costs will be eliminated by dropping the Football Helmets line, how will dropping Football Helmets affect the operating income of the company?

• A)Operating income will increase by $50,000.
• B)Operating income will increase by $70,000.
• C)Operating income will decrease by $90,000.
• D)Operating income will decrease by $20,000.

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Also known as the Black Death, it was a devastating global epidemic of bubonic plague that struck Europe and Asia in the 14th century.

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