The Most Recent Income Statement for the Strongsville Branch of the July

Multiple Choice

The most recent income statement for the Strongsville Branch of the July Company is presented below. $\begin{array}{lr}\text { Sales } & \$ 57,000 \\\text { Variable costs } & 31,500 \\\text { Contribution margin } & \$ 25,500 \\\text { Fixed costs: } & \\\text { Avoidable } & 13,500 \\\text { Unavoidable } & 20,000\\\text { Operating income }&\$8,000\end{array}$ The July Company is thinking of eliminating the Strongsville Branch because it is showing a loss.If the Strongsville Branch is eliminated, July's operating income will _____.

A) increase $8,000
B) decrease $12,000
C) decrease $31,500
D) not change