Westfall Watches has two product line: Luxury watches and Sporty watches. Income statement data for the most recent year follow:
--------------Total/Luxury/Sporty-------------
Sales revenue->$490,000/$360,000/$130,000
Variable expenses->355,000/235,000/120,000
Contribution margin->135,000/125,000/10,000
Fixed expenses->76,000/38,000/38,000
Operating income (loss)->$59,000/$87,000/$(28,000)
Assuming the Sporty line is discontinued, total fixed costs remain unchanged, and the space formerly used to produced the Sporty line is used to increase the production of Luxury watches by an additional 250%, how will operating income be affected?
A. Inccrease $302,500
B. Increase $312,500
C. Increase $236,500
D. Decrease $302,500