Solution-What will total operating income be

What will total operating income be

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Reference no: EM133107867

Question - Blossom Industries manufactures light fixtures for home, retail, and industrial customers. The retail line has been showing losses for several years, and management is considering dropping the line. Recent income statements have been very similar to the following information which was prepared for the most recent year:

	Home	Retail	Industrial	Total
Sales	$552300	$322300	$832300	$1706900
Variable costs	359500	220000	683000	1262500
Contribution margin	192800	102300	149300	444400
Fixed costs	127300	132300	117300	376900
Operating income	$65500	$(30000)	$32000	$67500

Of the fixed costs, $321900 of it is common costs that have been allocated equally to each product line. What will total operating income be if Blossom drops the retail line?

a) $77300

b) $(9800)

c) $20200

d) $97500

Reference no: EM133107867

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What will total operating income be

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