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 $470,000 Sales (1,100 units) Manufacturing costs: Direct materials Direct labor ($15 per hour) Overhead 160,000 80,000 150,000 ($80,000) Operating loss Overhead costs are 75% variable and the remaining 25% 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 A. increase by S80.000 O B. decrease by $80.000 C. increase by $37,500 0 D. decrease by $117,500