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PharoahIndustries manufactures light fixtures for home, retail, and industrial customers. The retail line has been showing losses for several years, and management is considering dropping

PharoahIndustries manufactures light fixtures for home, retail, and industrial customers. The retail line has been showing losses for several years, and management is considering dropping the line. Recent income statements have been very similar to the following information which was prepared for the most recent year:

Home

Retail

Industrial

Total

Sales

$551700

$321700

$831700

$1705100

Variable costs

359200

219200

682000

1260400

Contribution margin

192500

102500

149700

444700

Fixed costs

126700

131700

116700

375100

Operating income

$65800

$(29200)

$33000

$69600

Of the fixed costs, $320100 of it is common costs that have been allocated equally to each product line. What will total operating income be if Pharoah drops the retail line?

$22100

$(7900)

$98800

$77500

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