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

Question 149

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Use the information below to answer the following question(s) :
Aqua Life Jackets, Inc. has two product lines: adult jackets and children's jackets. Contribution margin income statement data for the most recent year follow:
Use the information below to answer the following question(s) : Aqua Life Jackets, Inc. has two product lines: adult jackets and children's jackets. Contribution margin income statement data for the most recent year follow:    -Assuming the Aqua Life Jackets, Inc. children's jackets line is dropped, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $22,000 per year, how will operating income be affected? A)  Decrease $28,000 B)  Increase $176,000 C)  Increase $28,000 D)  Increase $30,000
-Assuming the Aqua Life Jackets, Inc. children's jackets line is dropped, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $22,000 per year, how will operating income be affected?


A) Decrease $28,000
B) Increase $176,000
C) Increase $28,000
D) Increase $30,000

Correct Answer:

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