Pottery Unlimited has two product lines: cups and pitchers. Income statement data for the most recent year follow:

Total

Cups

Pitchers

Sales revenue

$460,000

$310,000

$150,000

Variable expenses

355,000

235,000

120,000

Contribution margin

105,000

75,000

30,000

Fixed expenses

76,000

38,000

38,000

Operating income (loss)

$29,000

$37,000

$(8,000)

Assuming the Pitcher line at Pottery Unlimited is dropped, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $45,000 per year, how will operating income be affected?

Question 1 options:

Decrease $15,000

Increase $45,000

Increase $44,000

Increase $15,000