inated if the product line is discontinued. I he remainder of the fixed costs will still be incu Data table Sales. . . . . $ 7,600,000 Cost of goods sold . . . . 6,450,000 Gross profit 1, 150,000 Operating expenses 1,400,000 Operating loss ... .... $ (250,000) Print DoneSuppose McGary is considering dropping its sweet potato fries product line. Assume that during the past year, the sweet potato fries product line income statement showed the following: (Click the icon to view the income statement data.) Fixed manufacturing overhead costs account for 40% of the cost of goods, while only 30% of the operating expenses are fixed. Since the sweet potato fries line is only one of McGary's french fries, 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 McGary. If the company decides to drop the product line, what will happen to the company's operating income? Should McGary drop the product line? . .. . Prepare an incremental analysis to show how dropping the sweet potato fries product line will affect McGary's operating income. (Use parentheses or a minus sign for a decrease in operating income.) McGary Analysis of Dropping the Sweet Potato Fries Product Line Expected decrease in revenues $ 7,600,000 Expected decrease in expenses: Variable expenses 1367000 Fixed expenses Expected decrease in total expenses Expected increase (decrease) in operating income