Reference no: EM132602903
Holy Shirts and Pants Co. makes two products, shirts and pants. Their sales information is below.
Total Shirts Pants
Sales revenue ?$1,200,000 ?$850,000 $350,000
Variable expenses ?950,000 ?720,000 ?230,000
Contribution margin ?250,000 ?130,000 ?120,000
Fixed expenses ?250,000 ?125,000 ?125,000
Operating income? (loss) ?$0 ?$5,000 ?$(5,000)
Question 1: The company is considering closing the pants line, saving $115,000 in fixed expenses. What impact would this have on operating income?
Group of answer choices
Option 1: Decrease $5,000
Option 2: Increase $10,000
Option 3: Increase $5,000
Option 4: Increase $5,000
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: The company is considering closing the pants line, saving $115,000 in fixed expenses. What impact would this have on operating income?
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