Home Sweet Home, a garden furniture company, has two departments: Decks and Pergolas. A recent monthly income statement for the company follows: Sales Less: Variable expenses Contribution margin Less: Fixed expenses Net operating income (loss) Department Decks Pergolas Total $3,000,000 $1,000,000 $4,000,000 900,000 400,000 1,300,000 2,100,000 600,000 2,700,000 1,400,000 800,000 2,200,000 $ 700,000 $ (200,000) $ 500,000 A study indicates that $240,000 of the fixed expenses being charged to pergolas are sunk costs or allocated costs that will continue even if the pergola department is dropped. In addition, the elimination of the pergola department will result in a 20% decrease in the sales of the decks department. Required: If the pergola department is dropped, what will be the effect on the net operating income of the company as a whole? Net operating income by Based on your calculations, is it worthwhile to drop or close down the pergola department? (Click to select)