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Clothing Retail Store's accountant prepared the following income statement for the teenagers' accessories product line: Sales $2,875,999 Less: Variable expenses 1,351,259 Contribution margin 1,523,759 Less:

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Clothing Retail Store's accountant prepared the following income statement for the teenagers' accessories product line: Sales $2,875,999 Less: Variable expenses 1,351,259 Contribution margin 1,523,759 Less: Fixed expenses: Wages $1,935,999 Insurance on inventory 57,599 Advertising 632,599 1,725,999 Net operating income (1055) $ (291,259) Management is concerned about the loss and is considering dropping the product line. It the product line is dropped, a job has to be created elsewhere for a longeterrn employee currently earning an annual salary of $101,500. Required: Calculate the increase or decrease in the operating income in both alternatives. Net operating income (loss)

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