The Internal Financial Statements of Pierce Solutions Show That Their

The internal financial statements of Pierce Solutions show that their product, LX90, incurred an operating loss in the most recent year. There were 20,000 units of LX90 sold in that year. Selected financial information about product LX90 follows. $\begin{array} { | l | c c | } \hline \text { Total sales revenue } & \$ & 160,000 \\\hline \text { Variable costs } & \$ & 100,000 \\\hline \text { Contribution margin } & \$ & 60,000 \\\hline \text { Fixed costs } & \$ & 70,000 \\\hline \text { Net operating loss } & \$ & ( 10,000 ) \\\hline\end{array}$
If product LX90 were to be dropped, the company would avoid $16,000 in fixed costs per year.

If Pierce Solutions were to drop product LX90, the change in annual operating income would be a(n) :

A) increase in total operating income of $44,000.
B) decrease in total operating income of $44,000.
C) increase in total operating income of $10,000.
D) decrease in total operating income of $10,000.