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 Luxury Sporty $490,000 $360,000 $130,000 355,000 235,000 120,000 135,000 125,000 10,000 76,000 38.000 38,000 $59.000 $87.000 $(28,000) If $20,000 of fixed costs will be eliminated by discontinuing the Sporty line, how will operating income be affected? 1) Increase $69,000 2) Increase $28,000 3) Increase $10,000 4) Decrease $30,000