Macaulay Roller Skates Has Three Product Lines-D,E,and F The Company Is Deciding Whether to Drop Product Line F

Macaulay Roller Skates has three product lines-D,E,and F.The following information is available: $$\begin{array} { | l | c | c | c | } \hline & \text { D } & \text { E } & \text { F } \\\hline \text { Sales revenue } & \$ 80,000 & \$ 40,000 & \$ 31,000 \\\hline \text { Variable costs } & ( 40,000 ) & ( 10,000 ) & ( 12,000 ) \\\hline \text { Contribution margin } & \$ 40,000 & \$ 30,000 & \$ 19,000 \\\hline \text { Fixed costs } & ( 20,000 ) & ( 10,000 ) & ( 25,000 ) \\\hline \text { Operating income (loss) } & \$ 20,000 & \$ 20,000 & \$ ( 6,000 ) \\\hline\end{array}$$ The company is deciding whether to drop product line F because it has an operating loss.Assuming fixed costs are unavoidable,if Macaulay drops product line F and does not replace it,what effect will this have on operating income?

A) Operating income will increase $6,000.
B) Operating income will increase $19,000.
C) Operating income will increase $25,000.
D) Operating income will decrease $19,000.

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