18-

Armor Sports, Inc. has two product linesbatting helmets and football helmets. The income statement data for the most recent year is as follows: Sales revenue Variable costs Contribution margin Fixed costs Operating income (loss) Total $850,000 (500,000) $350,000 (180,000) $170,000 Batting Helmets $500,000 (200,000) $300,000 (70,000) $230,000 Football Helmets $350,000 (300,000) $50,000 (110,000) $(60,000) What is the effect of dropping football helmets line on the operating income of the company? (Assume that fixed costs remain unchanged and that there would be no adverse effect on other sales.) A. Operating income will decrease by $350,000. B. Operating income will increase by $60,000. C. Operating income will decrease by $50,000. D. Operating income will increase by $70,000