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

Cambridge Roller Skates has three product lines-D,E,and F.The following information is available: $\begin{array}{|l|c|c|c|}\hline&\mathrm{D} & \mathrm{E} & \mathrm{F}\\\hline \text { Sales revenue } & \$ 70,000 & \$ 60,000 & \$ 30,000 \\\hline \text { Variable costs } & (40,000) & (15,000) & (10,000) \\\hline \text { Contribution margin } & \$ 30,000 & \$ 45,000 & \$ 20,000 \\\hline \text { Fixed costs } & (15,000) & (5,000) & (23,000) \\\hline \text { Operating income(loss) } & \$ 15,000 & \$40,000 & \$(3,000) \\\hline\end{array}$
The company is deciding whether to drop product line F because it has an operating loss.Assume that $21,000 of total fixed costs could be eliminated by dropping F.What effect would this decision have on operating income?

A) Operating income will increase by $23,000.
B) Operating income will increase by $1,000.
C) Operating income will decrease by $23,000.
D) Operating income will decrease by $1,000.

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