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Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Sales revenue Variable expenses Contribution

Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow: Sales revenue Variable expenses Contribution margin Fixed expenses Operating income (loss) Total $520,000 Luxury $390,000 Sporty $130,000 345,000 225,000 120,000 175,000 165,000 10,000 80,000 $95,000 40,000 $125,000 40,000 $(30,000) 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? O O O O A. Decrease $237,500 B. Increase $332,500 OC. Increase $412,500 OD. Increase $237,500

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