Springer Company used the report that follows to decide what products to drop.

* Direct fixed costs are specific to the product.
** Allocated based on sales dollars
Given this information, discontinuing Product B would cause the company's operating income to
€¢ Increase by $5,000
€¢ Increase by $2,000
€¢ Decrease by $5,000
€¢ Decrease by $2,000

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Product A Product B Product C Total $20,000 $15,000 $30,000 $65,000 Sales Cost of goods sold Variable 4,000 9,000 15,000 28,000 Salaries (direct fixed)* 2,000 2,000 6,000 10,000 General and admin. expenses 2,000 Variable 4,000 3,000 9,000 Advertising (direct fixed)" 1,000 2,000 1,000 4,000 Common fixed costs** 4.000 3.000 6.000 13.000 $ 7,000 $ (5.000) $ (1.000) $ 1,000 Operating income