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Use the Information Below to Answer the Following Question(s)

Question 155

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Use the information below to answer the following question(s) :
The income statement for Champion Parts is divided by its two product lines, Part L2 and Part C6, as follows:
Use the information below to answer the following question(s) : The income statement for Champion Parts is divided by its two product lines, Part L2 and Part C6, as follows:    -If Champion Parts can eliminate fixed costs of $40,000 by dropping the Part C6 line, then dropping it should result in which of the following? A)  Increase in total operating income of $25,000 B)  Increase in total operating income of $65,000 C)  Decrease in total operating income of $65,000 D)  Decrease in total operating income of $25,000
-If Champion Parts can eliminate fixed costs of $40,000 by dropping the Part C6 line, then dropping it should result in which of the following?


A) Increase in total operating income of $25,000
B) Increase in total operating income of $65,000
C) Decrease in total operating income of $65,000
D) Decrease in total operating income of $25,000

Correct Answer:

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