The income statement for Lovely Locks is divided by its two product lines, Curling Irons and Straighteners, as follows: If Lovely Locks can eliminate fixed costs of $35,000 by discontinuing the Straightener line, then discontinuing it should result in which of the following?
A)Increase in total operating income of $10,000
B)Decrease in total operating income of $15,000
C)Increase in total operating income of $15,000
D)Decrease in total operating income of $10,000

Question

The income statement for Lovely Locks is divided by its two product lines, Curling Irons and Straighteners, as follows:  If Lovely Locks can eliminate fixed costs of $35,000 by discontinuing the Straightener line, then discontinuing it should result in which of the following?
A)Increase in total operating income of $10,000 
B)Decrease in total operating income of $15,000 
C)Increase in total operating income of $15,000 
D)Decrease in total operating income of $10,000

Quizplus · Accepted Answer

The Answer of The income statement for Lovely Locks is divided by its two product lines, Curling Irons and Straighteners, as follows:  If Lovely Locks can eliminate fixed costs of $35,000 by discontinuing the Straightener line, then discontinuing it should result in which of the following?
A)Increase in total operating income of $10,000 
B)Decrease in total operating income of $15,000 
C)Increase in total operating income of $15,000 
D)Decrease in total operating income of $10,000

The Income Statement for Lovely Locks Is Divided by Its