All About Animals has two product lines: Cat food and Dog food. Contribution margin income statement data for the most recent year follow: Assuming the Dog food line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the Dog food line is used to double the production of Cat food, how will operating income be affected?
A)Increase $103,000
B)Increase $280,000
C)Increase $140,000
D)Decrease $103,000

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 the Dog food line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the Dog food line is used to double the production of Cat food, how will operating income be affected?
A)Increase $103,000 
B)Increase $280,000 
C)Increase $140,000 
D)Decrease $103,000

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 the Dog food line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the Dog food line is used to double the production of Cat food, how will operating income be affected?
A)Increase $103,000 
B)Increase $280,000 
C)Increase $140,000 
D)Decrease $103,000

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