Giant Company has threeproducts, A,B, and C. The following information isavailable:

Cookbook

Travel Book

Classics

Sales

$65,000

$100,000

$23,000

Variable costs

37,000

53,000

14,000

Contribution margin

28,000

47,000

9,000

Fixedcosts:

Avoidable

7,000

17,000

5,000

Unavoidable

8,000

14,000

5,400

Operating income

$13,000

$16,000

$(1,400)

Giant Company is thinking of dropping Product C because it is reporting a loss. Assuming Giant drops Product C and does NOT replaceit, operating income will________.

A.

increase by $1,400

B.

increase by $5,000

C.

decrease by $10,400

D.

decrease by