A. Increase $96,000 B. Increase $185,000 C. Increase $7,000 D. Decrease $7,000

Sole Sisters Company has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $520,000 355,000 165,000 76,000 $89,000 Hiking $380,000 235,000 145,000 38,000 $107,000 Fashion $140,000 120,000 20,000 38,000 ($18,000) Assuming the Fashion line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $27,000 per year, how will operating income be affected? Increase $96,000 Increase $185,000 Increase $7 ,000 Decrease $7,000