Macaulay Company Has Three Product Lines-D, E, and F Macaulay Company Is Thinking of Dropping Product Line F Because

Macaulay Company has three product lines-D, E, and F. The following information is available: $\begin{array}{|l|c|c|c|} \hline& \text { D } & \text { E } & \text { F } \\\hline \text { Sales } & \$ 70,000 & \$ 40,000 & \$ 30,000 \\\hline \text { Variable costs } & (40,000) & (20,000) & (10,000) \\\hline \text { Contribution margin } & 30,000 & 20,000 & 20,000 \\\hline \text { Fixed expenses } & (15,000) & (15,000) & (25,000) \\\hline \text { Operating income (loss) } & \$ 15,000 & \$ 5,000 & (\$ 5,000) \\\hline\end{array}$ Macaulay Company is thinking of dropping product line F because it is reporting an operating loss.
- Assuming fixed costs are unavoidable, if Macaulay Company drops product line F, and rents the space formerly used to produce product F for $17,000 per year, total income will be:

A) $10,000.
B) $12,000.
C) $20,000.
D) $25,000.