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 costs are unavoidable. Mission Company discontinues product line F and rents the space formerly used to produce product F for $18,000 per year, what affect will this have on operating income?

A) Increase $27,000
B) Increase $10,000
C) Decrease $10,000
D) Increase $33,000