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Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow: Total Hiking Fashion Sales revenue

Boots Plus has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow:

Total

Hiking

Fashion

Sales revenue

$ 520 comma 000$520,000

$ 380 comma 000$380,000

$140,000

Variable expenses

395 comma 000395,000

275 comma 000275,000

120,000

Contribution margin

125 comma 000125,000

105 comma 000105,000

20,000

Fixed expenses

81 comma 00081,000

40 comma 50040,500

40 comma 50040,500

Operating income (loss)

$44 comma 00044,000

$ 64 comma 500$64,500

$( 20 comma 500 )$(20,500)

If

$ 25 comma 000$25,000

of fixed costs will be eliminated by discontinuing the Fashion line, how will operating income be affected?

A.

Increase $ 49 comma 000$49,000

B.

Increase $ 93 comma 000$93,000

C.

Decrease $ 45 comma 500$45,500

D.

Increase $ 5 comma 000

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