Exercise 7-13 Marx sells computer equipment and home office furniture. Currently the furniture product line takes up approximately 50 percent of the company's retail floor space. The president of Marx is trying to decide whether the company should continue offering furniture or concentrate on computer equipment. Below is a product line income statement for the company. If furniture is dropped, salaries and other direct fixed costs can be avoided. In addition, sales of computer equipment can increase by 12 percent without affecting direct fixed costs, Allocated fixed costs are assigned based on relative sales. Computer Home Office Total Equipment Furniture $1,425,000 $1,097,250 $2,522,250 926.250 798,000 1.724,250 Sales Less cost of goods sold Contribution margin 498.750 299,250 798,000 Less direct fixed costs: Salaries 179,550 179,550 359,100 Other 59,850 59,850 119,700 Less allocated fixed costs: Rent 12,790 10,889 23,679 3,440 2,739 Insurance 6,179 4,110 3,139 Cleaning 7,249 67,110 58,415 President's salary 125,525 6,400 5,358 Other 11.758 $165,500 Net income / (loss) $(20,690) $144,810 Determine whether Marx should discontinue the furniture line and the financial benefit (cost) of dropping it Net income without Home Office Furniture is? Enter your answers as amounts only with neither