The Cabinet Shoppe Is Considering the Addition of a New

Multiple Choice

The Cabinet Shoppe is considering the addition of a new line of kitchen cabinets to its current product lines. Expected cost and revenue data for the new cabinets are as follows: If the new cabinets are added, it is expected that the contribution margin of other product lines at the cabinet shop will drop by $20,000 per year.


-If the new cabinet product line is added next year,the increase in net operating income resulting from this decision would be:

A) $80,000
B) $225,000
C) $125,000
D) $105,000