Part B: Dropping a Product Line Oga Corporation is a retailer of hightech products and is known for its good quality and innovation. Recently, the rm conducted a relevant cost analysis of one of its product lines that has only two products, FC1 and FC2. The sales for FC1 are decreasing and the purchase costs are increasing. The firm might drop FC2 and sell only FC1. Oga allocates xed costs to products based on sales revenue. When the president saw the income statements (see below), she agreed that FC2 should be dropped. If FC2 is dropped, sales of (31 are expected to increase by 10 percent next year, but the firm's cost structure will remain the same. FC-1 FC-2 Sales $230,000 $284,000 Variable costs: Cost of goods sold 76,000 142,000 Selling a. administrative 27,500 56,000 Contribution margin $126,500 $ 86,000 Fixed expenses: Fixed corporate costs 66,000 81,000 Fixed selling and administrative 18,000 27,000 Total xed expensesl $ 84,000 $108,000 Operating income $ 42,500 $(22,000) Required: To earn full or partial marks, you need to show all calculations in good form. 1. Find the expected change in annual operating income by dropping FC-2 and selling only FC-i. Should FC-2 be dropped? 2. By what percentage would sales from FC-1 have to increase in order to make up for the financial loss from dropping FC2