DM Corporation Has Provided You with the Following Budgeted Income

DM Corporation has provided you with the following budgeted income statement for one of its products:

DM has just encountered environmental problems with the product and will be forced to drop the product line altogether.DM will be able to eliminate 60% of the fixed costs.What will be the impact on operating income of the company?

A) Operating income will decrease by $186,000.
B) Operating income will decrease by $84,000.
C) Operating income will increase by $186,000.
D) Operating income will increase by $84,000.