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: $330,000 Sales (1,200 units) Manufacturing costs: Direct materials Direct labor ($15 per hour) Overhead 150,000 70,000 140.000 ($30,000) Operating loss 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 $49,000 O B. increase by $30,000 OC. decrease by $30,000 OD. decrease by $19,000