Inc. has two product

linesbatting

helmets and football helmets. The income statement data for the most recent year is as follows:

	Total	Batting Helmets	Football Helmets
Sales revenue	$1,000,000	$600,000	$400,000
Variable costs	(430,000)	(150,000)	(280,000)
Contribution margin	$570,000	$450,000	$120,000
Fixed costs	(240,000)	(90,000)	(150,000)
Operating income (loss)	$330,000	$360,000	$(30,000)

If $90,000 of fixed costs will be eliminated by dropping the football helmets line, how will dropping football helmets affect operating income of the company?

Question content area bottom

Part 1

A.

Operating income will increase by $90,000.

B.

Operating income will decrease by $30,000.

C.

Operating income will decrease by $150,000.

D.

Operating income will increase by $120,000