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Omar Industries manufactures two products: Regular and Super. The results of operations for 20x1 follow. Regular Super Total Units 10,000 4,000 14,000 Sales revenue $

Omar Industries manufactures two products: Regular and Super. The results of operations for 20x1 follow.

Regular Super Total
Units 10,000 4,000 14,000
Sales revenue $ 400,000 $ 960,000 $ 1,360,000
Less: Cost of goods sold 332,000 440,000 772,000
Gross Margin $ 68,000 $ 520,000 $ 588,000
Less: Selling expenses 68,000 153,000 221,000
Operating income (loss) $ 0 $ 367,000 $ 367,000

Fixed manufacturing costs included in cost of goods sold amount to $3 per unit for Regular and $20 per unit for Super. Variable selling expenses are $4 per unit for Regular and $20 per unit for Super; remaining selling amounts are fixed. If Omar Industries eliminates Regular and uses the available capacity to produce and sell an additional 1,400 units of Super, what would be the impact on operating income?

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