Golden Valley 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 Golden Valley 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 Equipment Home Office Furniture Total

Sales $1,430,000 $1,101,100 $2,531,100

Less cost of goods sold 929,500 800,800 1,730,300

Contribution margin 500,500 300,300 800,800

Less direct fixed costs:

Salaries 180,180 180,180 360,360

Other 60,060 60,060 120,120

Less allocated fixed costs:

Rent 14,190 11,603 25,793

Insurance 3,220 2,816 6,036

Cleaning 3,590 2,965 6,555

President's salary 71,120 58,418 129,538

Other 6,300 4,961 11,261

Net income / (loss) $161,840 ($20,703) $141,137

Determine whether Golden Valley should discontinue the furniture line and the financial benefit (cost) of dropping it.

Net income without Home Office Furniture is $_____________________

The company (should not drop/should drop/should be indifferent between dropping or not dropping) the Home Office Furniture product line.