Question: AMD has two product lines: Memory cards and Flash drives. Income statement data for the most recent year follow: Total Memory cards Flash drives Sales

AMD has two product lines: Memory cards and Flash drives. Income statement data for the most recent year follow:
Total
Memory cards
Flash drives
Sales revenue
$460,000
$310,000
$150,000
Variable expenses
355,000
235,000
120,000
Contribution margin
105,000
75,000
30,000
Fixed expenses
76,000
38,000
38,000
Operating income (loss)
$29,000
$37,000
$(8,000)
Assuming the Flash drive line at AMD is dropped, total fixed costs remain unchanged, and the space formerly used to produce the Flash drive line is used to produce same level of production of Memory cards, how will operating income be affected (Increase/decrease in operating income)?
Increase $31,000
Increase $8,000
Increase $45,000
Decrease $8,000

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