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

question 91

Multiple Choice

Use the information below to answer the following question(s) :
Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow:

-Assuming the Fashion line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the Fashion line is used to increase the production of Hiking boots by 250%, how will operating income be affected?

• A) Increase $137,500
• B) Increase $235,500
• C) Increase $186,500
• D) Decrease $137,500

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Definitions:

Buyer's Expense

Costs that are borne by the purchaser of goods or services, including but not limited to, shipping, taxes, and any other charges associated with the purchase.

Alongside the Ship

A term used in shipping to describe a situation where goods are positioned next to a vessel, ready to be loaded or having been unloaded, essentially indicating they are at the place of transfer.

Simple Delivery Contract

Type of contract in which purchased goods are transferred to the buyer from the seller either at the time of the sale or at some time later by the seller’s delivery.

Merchant

An individual or business that sells goods or services in a commercial setting.