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Cato Village selis home, and office furniture. Currently the home product line takes up approximately 50 percent of the company's retail floor space. The president

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Cato Village selis home, and office furniture. Currently the home product line takes up approximately 50 percent of the company's retail floor space. The president of Cato Village is trying to decide whether the company should continue offering offce furniture or concentrate on home furniture. Below is a product line income statement for the company. If office furniture is dropped, salaries and other direct fixed costs can be avoided, In addition, sales of home fumiture can increase by 15 percent without affecting direct fixed costs. Allocated fixed costs are assigned based on relative sales. Determine whether Cato Valage should discontinue the office furniture line and the financial benefit (cost) of dropping it. (Round answer to 0 decimal places, e-8.5,275.)

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