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

question 2

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 fixed costs remain unchanged, how would discontinuing the Fashion line affect operating income?

• A) Increase in total operating income of $29,000
• B) Increase in total operating income of $132,000
• C) Decrease in total operating income of $78,000
• D) Decrease in total operating income of $20,000

---

Definitions:

Trade Discount

A reduction from the listed price of goods or services offered to buyers in the business-to-business market to encourage purchase in larger quantities.

Real Estate Commission

The fee, typically a percentage of the sale price, paid to a real estate agent for their services in selling a property.

Selling Price

The amount of money for which a product or service is sold to the purchaser.

Trade Discount

A reduction on the list price granted by a seller to a buyer based on the quantity purchased or the buyer's trade status.