A company has provided the following data:

Sales	5,000 units
Sales price	$100 per unit
Variable cost	$70 per unit
Fixed cost	$30,000

If the sales volume decreased by 20%, variable costs increase by 10%, and all factors remain the same, what will happen to operating income?

Multiple Choice

1 ) Decrease by $58,000.

2) Decrease by $35,000.

3) No change in operating income.

4) Decrease by $75,00.