Barbour Corporation, located in Buffalo, New York, is a retailer of high-tech products and is known for its excellent quality and innovation. Recently. the firm conducted a relevant cost analysis of one of its product lines that has only two products. T-1 and T-2. The sales for T-2 are decreasing and the purchase costs are increasing. The fim'l might drop T-2 and sell only T-'l. Barbour allocates xed costs to products on the basis of sales revenue. When the president of Barbour saw the income statements {see below), he agreed that T2 should be dropped. lt' T-2 is dropped. sales of T-1 are expected to increase by 10% next year, but the rrn's cost structure will remain the same. Tl TZ Sales $245,000 $296,000 Variable costs: Cost of goods sold 79,000 148,000 Selling a administrative 19,000 59,000 Contribution margin $147,000 5 39,000 Fixed expenses: Fixed corporate costs 69,000 34,000 Fixed selling and administrative 21,000 30,000 Total fixed expenses 5 90,000 $114,000 Operating income 5 57,000 $[25,000} I Required: 1. Find the expected change in annual operating income by dropping T-2 and selling only T-1. 2. By what percentage would sales from T-1 have to increase in order to make up the nancial loss from dropping T-2'? (Enter your answer as a percentage rounded to 2 decimal places (Le. 0.1234 should be entered as 12.341.) 3. What is the required percentage increase in sales from T-1 to compensate for lost margin from T-2. if total fixed costs can be reduced by $53,000? [Enter your answer as a percentage rounded to 2 decimal places (Le. 0.1234 should be entered as 12.34).) et loss on discontinuing T2 _ 2. Required 56 increase in sales of T1 3. Required 56 increase in sales from T1