ver Roller Skates has three product lines D, E, and F. The following information

Question

ver Roller Skates has three product lines D, E, and F. The following information is available Sales revenue Variable costs Contribution margirn Fixed costs Operating income (loss) $80,000 $50,000 $30,000 (40,000) 15,000) (10,000) $40,000 $35,000 $20,000 (10,000) (15,000) (25,000) $30,000 $20,000 $(5,000) The company is deciding whether to drop product line F because it has an operating loss. Assuming fixed costs are unavoidable, if Iver drops product line F and rents the space formerly used to produce product F for $17,000 per year, total income will be Select one: o A. $20,000 O B. $25,000 o C. $10,000 D. $42,000

Explanation / Answer

The answer would be option D I.e, $42,000 will be the total Income in the given scenario.

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