Explain how will operating income be affected

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Reference no: EM131960809

Problem

Pottery Unlimited has two product lines: cups and pitchers. Income statement data for the most recent year follow:

	Total	Cups	Pitchers
Sales Revenue	460000	310000	150000
Variable Expenses	355000	235000	120000
Contribution Margin	105000	75000	30000
Fixed Expenses	76000	38000	38000
Operating Income (loss)	29000	37000	(8000)

If $22364 in fixed costs will be eliminated by dropping the Pitcher line, how will operating income be affected? If income drops, use a negative sign in front of the number.

Reference no: EM131960809

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