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Cinrich Gaming, a computer enhancement company, has three product lines: audio enhancers, video enhancers, and connection-speed accelerators. Common costs are allocated based on relative sales.

Cinrich Gaming, a computer enhancement company, has three product lines: audio enhancers, video enhancers, and connection-speed accelerators. Common costs are allocated based on relative sales. A product line income statement follows:

CinrichGaming Income Statement For the Year Ended December 31, 2020

Audio

Video

Accelerators

Total

Sales

$1,200,000 $2,450,000 $2,400,000 $6,050,000

Less cost of goods sold

730,000 1,435,000 2,070,000 4,235,000

Gross margin

470,000 1,015,000 330,000 1,815,000

Less other variable costs

49,750 71,760 21,670 143,180

Contribution margin

420,250 943,240 308,330 1,671,820

Less direct salaries

148,790 189,630 60,950 399,370

Less common fixed costs:

Rent

11,970 25,830 25,200 63,000

Utilities

4,370 9,430 9,200 23,000

Depreciation

5,890 12,710 12,400 31,000

Other administrative costs

79,230 170,970 166,800 417,000

Net income

$170,000 $534,670 $33,780 $738,450

Since the profit for accelerator devices is relatively low, the company is considering dropping this product line. Determine the annual impact on profit of dropping accelerator products.

The company will be select an impact blank (better/worse) off by blank annual impact on profit in dollars if it drops accelerators.

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