Black Productions Has Three Models: D, E, and F

Multiple Choice

Black Productions has three models: D, E, and F. The following information is available: Black Productions is thinking of discontinuing model F because it is reporting an operating loss. All fixed costs are unavoidable. Assume Black Productions is able to increase the sale price of product F to $35,000 with no change in volume of units sold and no change in variable costs or fixed costs. What effect will this have on operating income?

A) Increase $11,000
B) Increase $24,000
C) Decrease $11,000
D) Decrease $24,000