Use the Information Below to Answer the Following Question(s)

question 39

Multiple Choice

Use the information below to answer the following question(s) :
Pottery Unlimited has two product lines: cups and pitchers. Income statement data for the most recent year follow:

-Assuming the Pitcher line at Pottery Unlimited is dropped, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $45,000 per year, how will operating income be affected?

• A) Decrease $15,000
• B) Increase $45,000
• C) Increase $44,000
• D) Increase $15,000