Smiles Corporation has two product lines Whitening and Straightening. Operating income for each of the product lines is below:

Whitening Straightening

Revenues $1,070,000 $880,000

Operating Costs

Costs of Goods Sold 750,000 660,000

Lease rent (renewable each year) 90,000 75,000

Labour costs (paid hourly basis) 42,000 42,000

Depreciation equipment 25,000 22,000

Utilities 43,000 46,000

Allocated Corporate Overhead 50,000 40,000

Total Operating Costs 1,000,000 885,000

Operating Income (loss) 75,000 (5,000)

Smiles Corporation has an opportunity to open another product line, Extractions, with revenues and costs identical to Straightening (including costs of $22,000 to acquire equipment with a one-year useful life and zero disposal value). Starting this product line will increase corporate overhead costs by $4,000.

If Smiles Corporation decided to open another product line, Extractions, what would be Extractions operating income (loss)?

	a.	$9,000
	b.	$(26,000)
	c.	$31,000
	d.	$(5,000)
	e.	$35,000