Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Total Sporty $530,000 $130,000 355,000 120,000 175,000 10,000 80,000 40,000 $95,000 $(30,000) Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Luxury $400,000 235,000 165,000 40,000 $125,000 Assuming the Sporty line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the Sporty line is used to increase the production of Luxury watches by 250%, how will operating income be affected? A. Decrease $237,500 OB. Increase $237,500 OC. Increase $332,500 D. Increase $412,500 ***

Assuming the Sporty line is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the Sporty line is used to increase the production of Luxury watches by 250%, how will operating incomo be aflected? A. Decrease $237,500 B. Increase $237,500 C. Increase $332,500 D. Increase $412,500