How will operating income be affected

Assignment Help Accounting Basics

Reference no: EM131959447

Problem

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

	TOTAL	CUPS	PITCHERS
Sales Revenue	460,000	310,000	150,000
Variable Expenses	355,000	235,000	120,000
Contribution Margin	105,000	75,000	30,000
Fixed Expenses	76,000	38,000	38,000
Operating Income (Loss)	29,000	37,000	(8,000)

If $20412 in fixed costs will be eliminated by dropping the CUP line, how will operating income be affected?

Reference no: EM131959447

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