Response to the following problem:
Riverside Industries has three product lines: A, B and C. The following information is available:
Product A Product B Product C
Sales $100,000 $90,000 $44,000
Variable costs 76,000 48,000 35,000
Contribution margin 24,000 42,000 9,000
Avoidable fixed costs 9,000 18,000 3,000
Unavoidable fixed costs 6,000 9,000 7,700
Operating income (loss) $9,000 $15,000 $(1,700)
Riverside Industries is thinking about dropping Product C because it is reporting a loss. Assume Riverside Industries drops Product C and does not replace it.
What will happen to operating income?