The Income Statement for Germain Appliances Is Divided by Its

Multiple Choice

The income statement for Germain Appliances is divided by its two product lines, Toasters and Microwaves, as follows: If fixed costs remain unchanged and Germain Appliances discontinues the Microwave line, how will operating income change?

A) Will decrease by $160,000
B) Will increase by $45,000
C) Will decrease by $45,000
D) Will increase by $160,000