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 of one of its product that has only two products, T-1 and T-2. The sales for T-2 are decreasing and the purchase costs are increasing. The firm might drop T-2 and sell only T-1 Barbour allocates fixed costs to products on the basis of sales revenue. When the president of Barbour saw the income statement, he agreed that T-2 should be dropped. If this is done, sales of T-1 are expected to increase by 10% next year, the firm's cost structure will remain the same T-2 $ 295,000 89,000 $336,000 168,000 Sales Variable cost of goods sold Contribution margin Expenses $ 206,000 168,000 Fixed corporate costs Variable selling and administration Fixed selling and administration 79,000 29,000 31,000 94,000 69,000 40,000 Total expenses $139,000 $ 203,000 Operating income $ 67,000 (35,000) Required 1. Find the expected change in annual operating income by dropping T-2 and selling only T-1 et loss o n discontinuing T-2 $ 81,300