Sherman Hats, Inc has two product lines—batting helmets and football helmets

The income statement data for the most recent year is as follows:

Total Batting Helmets Football Helmets
Sales revenue $930,000 $600,000 $330,000
Variable costs (550,000 ) (250,000 ) (300,000 )
Contribution margin $380,000 $350,000 $30,000
Fixed costs (172,000 ) (80,000 ) (92,000 )
Operating income (loss) $208,000 $270,000 $(62,000 )

Assuming the football helmets line is dropped, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $110,000 per year, how will operating income be affected?
A) Operating income will increase by $80,000.
B) Operating income will increase by $30,000.
C) Operating income will decrease by $30,000.
D) Operating income will decrease by $80,000.

A .A)
Expected decrease in revenue $(330,000 )
Expected decrease in total variable costs $300,000
Expected decrease in fixed costs 0
Expected decrease in total costs 300,000
Additional income 110,000
Expected increase in operating income $80,000