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Begin by preparing a contribution margin income statement for the fruity rings' product line. $($Use a minus sign or parentheses to enter a loss.$)$

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Data table

Fixed manufacturing overhead costs account for $40\%$ of the cost of goods, while

only $30\%$ of the operating expenses are fixed. Since the fruity rings line is just

one of the company's cereal operations, only $$725,000$ of direct fixed costs $($the

majority of which is advertising$)$ will be eliminated if the product line is

discontinued. The remainder of the fixed costs will still be incurred by the

company.