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)

Assuming the Dog food line is discontinued, and all fixed costs will go away, how will operating income be affected?

A.

Increase $45,000

B.

Increase $7,000

C.

Decrease $7,000

D.

Decrease $45,000