1. Balser Company manufactures and sells a product called JYMP. Results of last year for the manufacture and sale of JYMP's are as follows:

   Sales (8,000 JYMPs at R120 each)	R960,000
   Less costs:
   Variable production costs	464,000
   Sales commissions (15% of sales)	144,000
   Salary of product line manager	100,000
   Fixed product line advertising	160,000
   Fixed manufacturing overhead	132,000
   Total costs	1,000,000
   Net operating loss	R(40,000)

   Balser anticipates no change in the operating results for JYMP in the foreseeable future. Balser is reexamining all of its product lines and is trying to decide whether or not to discontinue the manufacture and sale of JYMPs. Total fixed manufacturing overhead costs would not be affected by a decision to drop any one product line. Assume that discontinuing the JYMP line would result in a R90,000 increase in the contribution margin of other product lines. If Balser chooses to discontinue the JYMP line, then the change in operating income next year due to this action will be a:

   		R50,000 increase.
   		R40,000 increase.
   		R2,000 decrease.
   		R40,000 decrease.