K Sole Sisters Company has two product lines: Hiking boots and Fashion boots. Income statement data for the most recent year follow. Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $480,000 405,000 75,000 77,000 $(2,000) OA. Increase $7,000 OB. Increase $3,000 OC. Decrease $7,000 OD. Increase $5,000 Hiking $340,000 285,000 55,000 38,500 $16,500 Fashion $140,000 120,000 20,000 38,500 $(18,500) Assuming the Fashion line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $27,000 per year, how will operating income be affected?

Sole Sisters Company has two product lines: Hiking boots and Fashion boots. Income statement data for the most ecent year follow. Assuming the Fashion line is discontinued, total fixed costs remain unchanged, and the space formedy used to produce the line is rented for $27,000 per year, how will operating income be affected? A. Increase $7,000 B. Increase $3,000 C. Decrease $7,000 D. Inciease $5,000