Armor Sports, Inc. has two product lineslong dashbatting helmets and football helmets. The income statement data for the most recent year is as follows: Total Batting Helmets Football Helmets Sales revenue $ 840 comma 000 $ 500 comma 000 $ 340 comma 000 Variable costs (530 comma 000 ) (250 comma 000 ) (280 comma 000 ) Contribution margin $ 310 comma 000 $ 250 comma 000 $ 60 comma 000 Fixed costs (200 comma 000 ) (90 comma 000 ) (110 comma 000 ) Operating income (loss) $ 110 comma 000 $ 160 comma 000 $ (50 comma 000 ) What is the effect of dropping football helmets line on the operating income of the company? (Assume that fixed costs remain unchanged and that there would be no adverse effect on other sales.)
A. Operating income will increase by $40,000. B. Operating income will increase by $90,000. C. Operating income will decrease by $60,000. D. Operating income will decrease by $350,000.
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