A tennis equipment company produces two lines of tennis shoes, Professional and Amateur. Income statement data for the tennis shoes is shown below:

	Professional	Amateur	Total
Sales	$550,000	$750,000	$1,300,000
Variable costs	275,000	400,000	675,000
Direct fixed costs	100,000	300,000	400,000
Allocated fixed costs	37,500	112,500	150,000
Operating income	$137,500	$ (62,500)	$ 75,000

Since the Amateur line shows a loss, the company is considering eliminating this line of tennis shoes. Based on the data provided, should the company drop the Amateur tennis shoe line?

A.

No, operating income will decrease by $350,000.

B.

Yes, operating income will increase by $62,500.

C.

No, operating income will decrease by $50,000.

D.

Yes, operating income will increase by $25,000.