Paint and supplies Carpeting wallpaper Sales 190.000 230,000 70.000 Less variable cost 114.000 161,000 56.000 Fixed costs 28.000 37,500 22.000 Total cost 142.000 198.500 78.000 operating income 48.000 31 500 -8.000 Management is studying whether to drop wallpaper because of the changing market and accompanying loss if the line is dropped the following changes are expected to occur a. The vacated space will be remodeled at a cost of 15,000 and will be devoted to an expanded line of high and carpet sales of carpet are expected to increase by 100,000 (2 marks) b. Contemporary can cut wallpapers fixed costs by 50% (1 marks) c. Sales of paint and paint supplies are expected to fall by 30% (1 marks) d. Considering (a). (b) and (c), explain your decision whether to drop or retain the wallpaper (1 marks)