Mission Company has three product lines: D, E, and F. The following information is available:

D

E

F

Sales revenue $ 80,000 $44,000 $23,000

Variable expenses $ 41,000 $22,000 $16,000

$ 39,000 $22,000 $ 7,000

Fixed expenses $ 12,000 $15,000 $17,000

Operating income (loss) $ 27,000 $ 7,000 ($10,000)

Mission Company is thinking of discontinuing product line F because it is reporting an operating loss. All fixed expenses are unavoidable. Assuming Mission Company discontinues product line F and does not replaceit, what affect will this have on operating income?

A.

Decrease $7,000

B.

Increase $17,000

C.

Increase $10,000

D.

Increase $7,000