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A retail furniture company currently sells products in four categories; recliners, sofas, dining sets, and patio

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A retail furniture company currently sells products in four categories; recliners, sofas, dining sets, and patio.

Due to recent poor performance, the company is considering eliminating the patio furniture line.

If patio furniture is eliminated, 80% of the fixed costs assigned to the product line could be avoided. The company does experience cross-sales opportunities and estimates eliminating the patio furniture will lead to a 5% decrease in unit sales of each of the other three product line.

The company should

A. Eliminate the patio furniture line, which will increase the company's operating income by $2,000.

B. Keep the patio furniture line because eliminating it will decrease the company's operating income by $67,000.

C. Eliminate the patio furniture line, which will increase the company's operating income by $38,000.

D. Keep the patio furniture line because eliminating it will decrease the company's operating income by $94.000.