Magenta Company plans to drop a department that has a contribution margin of $47,000 and $72,000 in fixed costs. Of the fixed costs, $18,000 cannot be eliminated. If this department is dropped, the company's income will increase $18,000 decrease $25,000 increase $7,000 decrease $7,000 DeKalb Manufacturing has two major product lines, Huskies and Hokies. Income statements for the two product lines follow: Huskies Hokies Revenues $500,000 $400,000 Variable costs 350,000 150,000 Product line fixed costs 130,000 100,000 Allocated corporate fixed costs 120,000 90,000 Operating income (loss) $(100,000) $60,000 If the Huskies product line were dropped, all of its product line fixed costs could be avoided. Should the Huskies product line be dropped, and why? O A. No, profits decrease $150,000 B. No, profits decrease $45,000 C. No, profits decrease $20,000 D. Yes, profits increase $75,000