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 and increase the sale of Part L2 by 3,000 units at a selling price of $30 per unit and a contribution margin of $4 per unit, then dropping the Part C6 should result in which of the following?
A) Increase in total operating income of $13,000
B) Increase in total operating income of $53,000
C) Decrease in total operating income of $13,000
D) Decrease in total operating income of $53,000
Correct Answer:
Verified
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