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 Germain Appliances can eliminate fixed costs of $37,000 by discontinuing the Microwave line, then discontinuing it should result in which of the following?

A) Increase in total operating income of $45,000
B) Increase in total operating income of $8000
C) Decrease in total operating income of $8000
D) Decrease in total operating income of $45,000