The income statement for Germain Appliances is divided by its two product lines, Toasters and Microwaves, as follows: If Germain Appliances can eliminate fixed costs of $37,000 by discontinuing the Microwave line, then discontinuing it should result in which of the following?
A)Increase in total operating income of $45,000
B)Increase in total operating income of $8000
C)Decrease in total operating income of $8000
D)Decrease in total operating income of $45,000

Question

The income statement for Germain Appliances is divided by its two product lines, Toasters and Microwaves, as follows:  If Germain Appliances can eliminate fixed costs of $37,000 by discontinuing the Microwave line, then discontinuing it should result in which of the following?
A)Increase in total operating income of $45,000 
B)Increase in total operating income of $8000 
C)Decrease in total operating income of $8000 
D)Decrease in total operating income of $45,000

Quizplus · Accepted Answer

The Answer of The income statement for Germain Appliances is divided by its two product lines, Toasters and Microwaves, as follows:  If Germain Appliances can eliminate fixed costs of $37,000 by discontinuing the Microwave line, then discontinuing it should result in which of the following?
A)Increase in total operating income of $45,000 
B)Increase in total operating income of $8000 
C)Decrease in total operating income of $8000 
D)Decrease in total operating income of $45,000

The Income Statement for Germain Appliances Is Divided by Its