The income statement for Germany Best Appliances is divided by its two product lines, Toasters and Microwaves, as follows:
Sales revenue
Variable expenses
Contribution margin
Fixed expenses
Operating income (loss)
Toaster
Microwave
Total
$640,000
$255,000
$895,000
$480,000
$210,000
$690,000
$160,000
$45,000
$205,000
$80,000
$80,000
$160,000
$80,000
$-35,000
$45,000
If Germany Best Appliances can eliminate fixed costs of $37,000 by discontinuing the Microwave line, then discontinuing it should result in which of the following?
Select one:
A. Increase in total operating income of $8000
B. Decrease in total operating income of $45,000
C. Decrease in total operating income of $8000
D. Increase in total operating income of $45,000
