Below is information regarding each of Company Xs two products, cups and bowls:

	Cups	Bowls
Sales revenue	$400,000	$130,000
Variable expenses	$225,000	$120,000
Contribution margin	$175,000	$10,000
Fixed expenses	$39,000	$39,000
Operating income (loss)	$136,000	$(29,000)

The company is considering eliminating the bowls. If the total fixed costs remain unchanged but the freed capacity is used to increase the production of cups to 250% of current production, how will operating income be affected?

Group of answer choices

Increase $ 359,500

Increase $437,500

Decrease $ 252,500

Increase $252,500

None of these.