Camera Corner is considering eliminating Model AE2 from its camera line because of losses over the past quarter. The past three months of information for Model AE2 are summarized below:



Overhead costs are 75% variable and the remaining 25% is depreciation of special equipment for model AE2 that has no resale value.

If Model AE2 is dropped from the product line, operating income will ________.

		decrease by $10,000
		increase by $27,500
		increase by $10,000
		decrease by $37,500