Question Help State Road Fabricators Inc. is considering eliminating Model A02777 because of losses over the past quarter. The past three months of information for Model A02777 are summarized below: Sales (1,500 units) $300,000 Manufacturing costs: Direct materials 150,000 Direct labor ($15 per hour) 70,000 Overhead 110,000 Operating loss ($30,000) Overhead costs are 65% variable and the remaining 35% is depreciation of special equipment for model A02777 that has no resale value If Model A02777 is dropped from the product line, operating income will O A. Increase by $38,500 O B. decrease by $8,500 Oc. increase by $30,000 D. decrease by $30,000