HiTech manufactures two products: Regular and Super. The results of operations for 20x1 follow.

	Regular		Super				Total
Units	10,000			3,700		13,700
Sales	$240,000			$740,000		$980,000
Less: Cost of goods sold	180,000			481,000		661,000
Gross margin	$ 60,000			$259,000		$319,000
Less: Selling expenses	60,000			134,000		194,000
Operating income	$ 0			$125,000		$125,000

Fixed manufacturing costs included in cost of goods sold amount to $3 per unit for Regular and $20 per unit for Super. Variable selling expenses are $4 per unit for Regular and $20 per unit for Super; remaining selling amounts are fixed.

41. HiTech wants to drop the Regular product line. If the line is dropped, company-wide fixed manufacturing costs would fall by 10% because there is no alternative use of the facilities. What would be the impact on operating income if Regular is discontinued?

A. $0.

B. $10,400 increase.

C. $20,000 increase.

D. $39,600 decrease.

E. None of the above.