Mix Masters, Inc The Impact on Operating Income for Mix Masters, Inc

Mix Masters, Inc., currently sells Product A and Product B in the following annual sales mix.For the coming year the company expects that sales of Product A will increase by 50% and sales of Product B will decrease by 33.3%.Current contribution margin ratios will remain unchanged for next year as will total fixed costs of $700,000. $$\begin{array} { l c c c } & \text { Current Sales Mix } & \text { Sales Mix Shift } & \text { CM Ratio } \\\text { Product A } & \$ 40,000 & \$ 60,000 & 25 \% \\\text { Product B } & \$ 60,000 & \$ 40,000 & 50 \% \\\text { Total Sales } & \$ 100,000 & \$ 100,000 &\end{array}$$ The impact on operating income for Mix Masters, Inc., because of the shift in sales mix is:

A) $5,000 decrease.
B) $10,000 decrease.
C) $5,000 increase.
D) $10,000 increase.