Question: Contribution margin income statement data for the most recent year follow: Total Cat Food Dog Food Sales revenue $385,000 $300,000 $85,000 Variable expenses $205,000 $165,000
Contribution margin income statement data for the most recent year follow:
| Total | Cat Food | Dog Food | |
| Sales revenue | $385,000 | $300,000 | $85,000 |
| Variable expenses | $205,000 | $165,000 | $40,000 |
| Contribution margin | $180,000 | $135,000 | $45,000 |
| Fixed expenses | $102,000 | $50,000 | $52,000 |
| Operating income (loss) | $78,000 | $85,000 | $(7,000) |
Assuming the Dog food line is discontinued, and all fixed costs will go away, how will operating income be affected?
A.
Increase $45,000
B.
Increase $7,000
C.
Decrease $7,000
D.
Decrease $45,000
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