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Clean Floor Company has three product lines, A, B, and C. The following information is available: A B C Sales $60,000 $38,000 $26,000 Variable costs

Clean Floor Company has three product lines, A, B, and C. The following information is available:

A B C
Sales $60,000 $38,000 $26,000
Variable costs 36,000 18,000 12,000
Contribution margin 24,000 20,000 14,000
Fixed expenses 12,000 15,000 16,000
Operating income (loss) $12,000 $5,000 $2,000

Clean Floor Company is thinking of dropping producting line C because it is reporting an operating loss. Assuming Clean Floor Company drops line C and does not replace it, the operating income will:

a. increase $2,000

b. decreased $14,000

c. increase $14,000

d. increase $16,000

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