Michael's Hats,Inc

question 144

Multiple Choice

Michael's Hats,Inc.has two product lines-batting helmets and football helmets.The income statement data for the most recent year is as follows:

If $90,000 of fixed costs will be eliminated by dropping the football helmets line,how will dropping football helmets affect operating income of the company?

• A)Operating income will increase by $90,000.
• B)Operating income will increase by $120,000.
• C)Operating income will decrease by $150,000.
• D)Operating income will decrease by $30,000.

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