items, including an overnight case. The company has been experiencing losses on the overnight case for some time, as shown on the following contribution format income statement: Dexter Products, Inc. Income StatementOvernight Cases For the Quarter Ended June 30 Sales $ 410,000 Variable expenses: Variable manufacturing expenses $ 138,000 Sales commissions 46,000 Shipping 21,000 Total variable expenses 205,000 Contribution margin 205,000 Fixed expenses: Salary of product-line manager 28,000 General factory overhead 113,000 * Depreciation of equipment (no resale value) 40,000 Advertisingtraceable 123,000 Insurance on inventories 11,000 Purchasing department 44,000 Total fixed expenses 359,000 Net operating loss $ (154,000 ) *Allocated on the basis of machine-hours. Allocated on the basis of sales dollars. Discontinuing the overnight cases would not affect the companys sales of its other product lines, its total general factory overhead, or its total purchasing department expenses. Required a. Compute the increase or decrease of net operating income if the overnight case are continued or discontinued. b. Would you recommend that the company discontinue the manufacture and sale of overnight cases? Yes No