JF Cola is currently considering whether to discontinue production of its diet drink. The diet drink product had the following product loss last year:

Sales Revenue	$260,000
Cost of Goods Sold	(160,000)
Gross Profit	100,000
Operating Expenses	(120,000)
Operating Loss	$(20,000)

25% of the cost of goods sold represents fixed manufacturing overhead costs and 30% of the operating expenses are fixed. Only $60,000 of the fixed costs will be eliminated if the diet line is discontinued.

1) What will happen to the companys operating income if the diet line is discontinued?

A. The company's operating income will decrease.

B. The company's operating income will increase.

2) By how much will the company's operating income change if the diet line is discontinued?