Mission Company Has Three Product Lines: D, E, and F

Multiple Choice

Mission Company has three product lines: D, E, and F. The following information is available: Mission Company is thinking of discontinuing product line F because it is reporting an operating loss. All fixed expenses are unavoidable. Assuming Mission Company discontinues product line F and does not replace it, what affect will this have on operating income?

A) Increase $10,000
B) Increase $17,000
C) Increase $7000
D) Decrease $7000