Michael's Hats, Inc. has two product linesbatting helmets and football helmets. The income statement data for the most recent year is as follows:

	Total	Batting Helmets	Football Helmets
Sales revenue	$900,000	$500,000	$400,000
Variable costs	(480,000)	(200,000)	(280,000)
Contribution margin	$420,000	$300,000	$120,000
Fixed costs	(230,000)	(80,000)	(150,000)
Operating income (loss)	$190,000	$220,000	$(30,000)

If $90,000 of fixed costs will be eliminated by dropping the football helmets line, how will dropping football helmets affect operating income of the company?

• A.

  Operating income will increase by $90,000.

• B.

  Operating income will increase by $120,000.

• C.

  Operating income will decrease by $150,000.

• D.

  Operating income will decrease by $30,000.

• E.

  none of the above.