7) Cesar Company has three product lines: A, B and C. The following annual information is available:

Product A Product B Product C

Sales $100,000 $90,000 $44,000

Variable costs 76,000 48,000 35,000

Contribution margin 24,000 42,000 9,000

Avoidable fixed costs 9,000 18,000 3,000

Unavoidable fixed costs 6,000 9,000 7,700

Operating income(loss) $9,000 $15,000 $(1,700)

Assume Cesar Company drops Product C. Cesar Company then doubles the production and sales of Product B without increasing fixed costs. What will happen to operating income?

A) increase by $15,000

B) increase by $24,000

C) increase by $36,000 please explain why this is the correct answer

D) increase by $42,000