Sherman Hats,Inc.has two product lines-batting helmets and football helmets.The income statement data for the most recent year is as follows: Assuming the football helmets line is dropped,total fixed costs remain unchanged,and the space formerly used to produce the line is rented for $110,000 per year,how will operating income be affected?
A) Operating income will increase by $80,000.
B) Operating income will increase by $30,000.
C) Operating income will decrease by $30,000.
D) Operating income will decrease by $80,000.
Correct Answer:
Verified
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