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All About Animals has two product lines: Cat food and Dog food. Contribution margin income statement data for the most recent year follow: Total Cat

All About Animals has two product lines: Cat food and Dog food. Contribution margin income statement data for the most recent year follow:

Total

Cat Food

Dog Food

Sales revenue

$385,000

$300,000

$85,000

Variable expenses

$205,000

$165,000

$40,000

Contribution margin

$180,000

$135,000

$45,000

Fixed expenses

$102,000

$50,000

$52,000

Operating income (loss)

$78,000

$85,000

$(7,000)

If $12,000 of fixed costs will be eliminated by discontinuing the Dog food line, how will operating income be affected?

A. Increase $123,000

B. Decrease $33,000

C. Increase $45,000

D. Decrease $57,000

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