Determine operating income if company drops the line

Question

Riverside Industries has threeproduct lines, A, B, and C. The following information isavailable:

                                                              A                    B                C                       

             Sales                                  $100,000            $90,000        $44,000

            Variablecosts                        76,000              48,000          35,000

            Contribution margin              $24,000            $42,000          $9,000

            Fixed costs:

             Avoidable                              9,000              18,000            3,000

             Unavoidable                          6,000               9,000            7,700

            Operatingincome                   $9,000            $15,000         $(1,700)

Riverside Industries is thinking of dropping product line C because it is reporting a loss. Assuming Riverside drops line C and does not replace it, the operating income will _____.

A. increase by$2,400
B. increase by$600
C. decrease by$6,000
D. decrease by$9,000