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Nutall Corporation is considering dropping product N28X. Data from the company's accounting system appear below: Sales $ 730,000 Variable expense $ 336,000 Fixed manufacturing expenses

Nutall Corporation is considering dropping product N28X. Data from the company's accounting system appear below:

Sales $ 730,000
Variable expense $ 336,000
Fixed manufacturing expenses $ 256,000
Fixed selling and administrative expense $ 204,000

All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $199,000 of the fixed manufacturing expenses and $114,000 of the fixed selling and administrative expenses are avoidable if product N28X is discontinued.

Required:
1.

What would be the effect on the company's overall net operating income of dropping product N28X? (Input the amount as a positive value. Omit the "$" sign in your response.)

Net operating income would be (Click to select)increasedecrease by $ .

2.

Should the product be dropped?

No
Yes

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