Billings Company is a decentralized wholesaler with five autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to the divisional managers who have the highest ROIs. Operating results for the company's Office Products Division for the most recent year are given below:

Sales	$24,000,000
Variable expenses	15,416,000
Contribution margin	8,584,000
Fixed expenses	6,784,000
Net operating income	$1,800,000
Divisional operating assets	$6,000,000

The company had an overall return on investment (ROI) of 15% last year (considering all divisions). The Office Products Division has an opportunity to add a new product line that would require an additional investment in operating assets of $2,650,000. The cost and revenue characteristics of the new product line per year would be:

Sales

$7,685,000

Variable expenses

60% of sales

Fixed expenses

$2,551,420

Suppose that the company's minimum required rate of return on operating assets is 15% and that performance is evaluated using residual income.

(a)	Compute the Office Products Division's residual income for the most recent year; also compute the residual income as it would appear if the new product line is added. (Omit the "$" sign in your response.)

	Residual income
Present	$
New Line	$
Total for company	$