Respond to the following:

Assume that $15,000 of total fixed costs could be eliminated by dropping F. What effect would this decision have on operating income of the following data?

Sales Variable costs Contribution margin Fixed expenses Operating income (loss) E $70,000 $40,000 (40,000) (20,000) 30,000 20,000 (15,000) (15,000) $15,000 $5,000 D F $30,000 (10,000) 20,000 (25,000) ($5,000)