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 $34,000 and increase the sale of Toasters by 6300 units at a selling price of $30 per unit and a contribution margin of $12 per unit, then discontinuing the Microwaves should result in which of the following?
A) Increase in total operating income of $64,600
B) Increase in total operating income of $30,600
C) Decrease in total operating income of $64,600
D) Decrease in total operating income of $30,600
Correct Answer:
Verified
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