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ABC Company has three product linesD, E, and F. The following information is available: D E F Sales revenue $90,000 $40,000 $31,000 Variable costs (40,000)

ABC Company has three product linesD, E, and F. The following information is available:

D E F
Sales revenue $90,000 $40,000 $31,000
Variable costs (40,000) (15,000) (10,000)
Contribution margin $50,000 $25,000 $21,000
Fixed costs (20,000) (15,000) (23,000)
Operating income (loss) $30,000 $10,000 $(2000)

The company is deciding whether to drop product line F because it has an operating loss. Assuming fixed costs are unavoidable, if ABC drops product line F, what effect will this have on operating income?

Select one:

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