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. Assuming Mission Company discontinues line F and is able to double the production and sales of product line E without increasing fixed costs. What affect will this have on operating income?

A) Decrease $15,000
B) Increase $15,000
C) Increase $46,000
D) Increase $40,000