Cupid Corp. has three product lines D, E, and F. The following information is available: E $40,000 Sales revenue Variable costs Contribution margin Fixed costs Operating income (loss) D $90,000 (20,000) $70.000 (10,000) $60.000 (5000) $35,000 (15,000) $20,000 $30,000 (10.000) $20,000 (24.000) $(4000) The company is deciding whether to drop product line F because it has an operating loss. Assuming fixed costs are unavoidable, if Cupid drops product line F and does not replace it, what effect will this have on operating income? Operating income will increase $20,000. o Operating income will increase $24,000. N Operating income will decrease $20,000. o Oporating income will increase $4000 Comet, Inc. has two product linesbatting helmets and football helmets. The income statement data for the most recent year is as follows: Sales revenue Variable costs Contribution margin Fixed costs Operating income (loss) Total $820,000 (530,000 $290,000 (182,000) $108,000 Batting Helmets $500,000 (250,000) $250,000 (90,000 $160,000 Football Helmets $320,000 (280,000) $40,000 (92.000) $152.000 Assuming the football helmets line is dropped, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $110,000 per year, how will operating income be affected? o Operating income will decrease by $70,000. ns o Operating income will increase by $40,000. o Operating income will increase by $70,000. Operating income will decrease by $40,000