All About Animals Has Two Product Lines: Cat Food and Dog

Multiple Choice

All About Animals has two product lines: Cat food and Dog food. Contribution margin income statement data for the most recent year follow: Assuming the Dog food is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $26,000 per year, how will operating income be affected?

A) Increase $254,000
B) Increase $527,000
C) Decrease $19,000
D) Increase $19,000