Sousa Corporation Makes a Variety of Wind Instrument Reeds

Sousa Corporation makes a variety of wind instrument reeds. The company produces 5,000 P7 clarinet reeds each year. Each P7 clarinet reed sells for $5 and has a contribution margin of $2. Currently, $16,000 of fixed manufacturing overhead is allocated to the P7 clarinet reed product line. If Sousa Corporation drops the P7 clarinet reed product line, $6,000 of fixed manufacturing overhead costs would be avoided. What would be the impact on total operating income if the P7 clarinet reed product line were to be dropped?

A) Increase in total operating income of $6,000
B) Decrease in total operating income of $6,000
C) Increase in total operating income of $4,000
D) Decrease in total operating income of $4,000