Barbour Corporation, located in Buffalo. New York, is a retailer of hightech products and is known for its excellent quality and innovation. Recently, the firm conducted a relevant cost analysis ofone of its product lines that has only two products, T-i and T-2. The sales for T2 are decreasing and the purchase costs are increasing. The firm might drop T2 and sell only T'l. Barbour allocates fixed costs to products on the basis of sales revenue. When the president of Barbour saw the income statements (see below}. he agreed that T-2 should be dropped. It T-2 is dropped, sales of T-i are expected to increase by 10 percent next year, but the firm's cost structure will remain the same. T-l T-Z Sales $ 285,999 $ 328,999 Variable costs: Cost of goods sold 87,999 164,999 Selling 9 administrative 27,999 67,999 Contribution margin $ 1?1,999 $ 9?,999 Fixed expenses: Fixed corporate costs ??,999 92,999 Fixed selling and administrative 29,999 38,999 Total fixed expenses $ 196,999 $ 139,999 Operating income :5 55,999 $ (33,999) Required: 1. Find the expected change in annual operating income by dropping T2 and selling only Ti. 2. By what percentage would sales from T1haye to increase in order to make up the nancial loss from dropping TZ? [Enter your answer as a percentage rounded to Zdecimal places (Le. 0.1234 should be entered as 12.341.) 3. What is the required percentage increase in sales from T'l to compensate for lost margin from T2, iftotal xed costs can be reduced by $54,900? {Enter your answer as a percentage rounded to 2 decimal places (Le. 0.1234 should be entered as 1234).} Required cl-'B increase in sales from T'l _- Required cl-'B increase in sales from T'l _