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

question 65

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 line is rented for $22,000 per year, how will operating income be affected?

• A) Decrease $28,000
• B) Increase $176,000
• C) Increase $28,000
• D) Increase $30,000

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Definitions:

Blue Jeans

Durable, casual trousers made from denim cloth, typically blue, originally designed for cowboys and miners.

Beef Supply

Refers to the total quantity of beef available in the market from producers, which is influenced by factors like production levels, import/export dynamics, and cattle population.

Grain Prices

The cost or price of grains such as wheat, corn, and rice, often subject to market conditions and agricultural output.

Health Problems

Physical or mental conditions that impair a person's well-being, ranging from minor illnesses to chronic diseases.