Use the Information Below to Answer the Following Question(s)

question 90

Multiple Choice

Use the information below to answer the following question(s) :
Aqua Life Jackets, Inc. has two product lines: adult jackets and children's jackets. Contribution margin income statement data for the most recent year follow:

-Assuming the Aqua Life Jackets, Inc. children's jackets line is dropped, total fixed costs remain unchanged, and the space formerly used to produce the children's jackets line is used to double the production of adult jackets, how will operating income be affected?

• A) Increase $110,000
• B) Increase $60,000
• C) Increase $118,000
• D) Decrease $60,000

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Definitions:

Bad News

Unfavorable or distressing information that needs to be communicated.

Indirect Approach

A method of addressing a problem or communicating that is not straightforward, often involving subtlety or circumvention.

Well-Written Reasons

Compelling or persuasively articulated arguments or explanations designed to justify or explain a decision or action.

Apologetic

Expressing regret or sorrow for a wrongdoing, mistake, or oversight.