All About Animals has two product lines: Cat food and Dog food. Contribution margin income statement data for the most recent year follow: Assuming total fixed costs remain unchanged, how would discontinuing the Dog food line affect operating income?
A)Increase in total operating income of $208,000
B)Increase in total operating income of $7,000
C)Decrease in total operating income of $45,000
D)Decrease in total operating income of $461,000

Question

All About Animals has two product lines: Cat food and Dog food. Contribution margin income statement data for the most recent year follow:  Assuming total fixed costs remain unchanged, how would discontinuing the Dog food line affect operating income?
A)Increase in total operating income of $208,000 
B)Increase in total operating income of $7,000 
C)Decrease in total operating income of $45,000 
D)Decrease in total operating income of $461,000

Quizplus · Accepted Answer

The Answer of All About Animals has two product lines: Cat food and Dog food. Contribution margin income statement data for the most recent year follow:  Assuming total fixed costs remain unchanged, how would discontinuing the Dog food line affect operating income?
A)Increase in total operating income of $208,000 
B)Increase in total operating income of $7,000 
C)Decrease in total operating income of $45,000 
D)Decrease in total operating income of $461,000

All About Animals Has Two Product Lines: Cat Food and Dog