Karlson Roller Skates has three product lineslong dashD, E, and F. The following information is...
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Accounting
Karlson Roller Skates has three product lineslong dashD, E, and F. The following information is available: D E F Sales revenue $ 70 comma 000 $ 60 comma 000 $ 30 comma 000 Variable costs (40 comma 000) (5 comma 000) (12 comma 000) Contribution margin $ 30 comma 000 $ 55 comma 000 $18 comma 000 Fixed costs (10 comma 000) (15 comma 000) (23 comma 000) Operating income (loss) $ 20 comma 000 $ 40 comma 000 $(5 comma 000) The company is deciding whether to drop product line F because it has an operating loss. Assuming fixed costs are unavoidable, if Karlson drops product line F and rents the space formerly used to produce product F for $ 17 comma 000 per year, total operating income will be ________. A. $ 18 comma 000 B. $ 54 comma 000 C. $ 23 comma 000 D. $ 12 comma 000
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