Financial data for ABC company is as follows

Product A Product B Product C

Sales $70,000 $97,000 $23,000

Variable costs 37,000 51,000 15,000

Contribution margin 33,000 46,000 8,000

Fixed costs:

Avoidable 10,000 20,000 10,000

Unavoidable 7,000 12,000 9,400

Operating income $16,000 $14,000 $ (11,400)

What happens to the operating income of ABC company if it discontinues sales of Product C (due to its losses?)

A.

decrease by $11,400

B.

decrease by $6,000

C.

increase by $2,000

D.

increase by $11,400