Wedding Supply Is Trying to Decide Whether or Not to Continue

Multiple Choice

Wedding Supply is trying to decide whether or not to continue distributing reception supplies.The following information is available for Wedding Supply's business segments. $\begin{array}{lrrr}&\text { Reception Supplies }&\text { Bridal Dresses }&\text { Floral Decorations }\\\hline\text { Sales } & \$ 160,000 & \$ 110,000 & \$ 210,000 \\\text { Variable costs } & 84,000 & 50,000 & 120,000\\\text { Contribution margin } & 76,000 & 60,000 & 90,000 \\\text { Direct fixed costs } & 50,000 & 20,000 & 25,000 \\\text { Allocated common fixed costs } & 30,000 & 25,000 & 30,000 \\\text { Net income }&(\$4,000) &\$15,000&\$35,000\end{array}$ If reception supplies are dropped, floral decoration sales are expected to increase by 20%.What impact will the increase in floral decorations have on overall profitability?

A) Income will increase by $7,000.
B) Income will increase by $16,000.
C) Income will decrease by $18,000.
D) Income will decrease by $8,000.