Gary Brown Manufacturing makes single kayaks, double kayaks, and lightweight competitive kayaks. The double kayak line has been showing losses for several years, and management is considering dropping the line. Recent income statements have been very similar to the following information which was prepared for the most recent year:

Of the fixed costs, $393,750 is common costs that have been allocated equally to each product line. What will total operating income be if Brown drops the double kayak line?

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Double Single Competitive Total $2,125,000 Sales $687,500 $ 400,000 $1,037,500 446,875 850,750 Variable costs 1,569,625 272,000 Contribution margin 240,625 Fixed costs Operating income 555,375 186,750 143,750 128,000 462,500 156,250 162,500 $84,375 S(34,500) $92,875 $43,000