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Please ans asap Your Retail Store's accountant prepared the following income statement for the ladies' accessories product line: $3,175,000 1,492,250 1,682,750 Sales Less: Variable expenses
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Your Retail Store's accountant prepared the following income statement for the ladies' accessories product line: $3,175,000 1,492,250 1,682,750 Sales Less: Variable expenses Contribution margin Less: Fixed expenses: Wages Insurance on inventory Advertising Net operating income (loss) $1,143,000 63,500 698,500 1,905,000 $ (222,250) Management is concerned about the loss and is considering dropping the product line. If the product line is dropped, a job has to be created elsewhere for a long-term employee currently earning an annual salary of $95,250. Required: Calculate the increase or decrease in the operating income in both alternatives. Keep Accesories Product Line Drop Accesories Product Line Sales Fixed expenses Net operating income (loss) Net operating income (loss) $ (222,250) Management is concerned about the loss and is considering dropping the product line. If the product line is dropped, a job has created elsewhere for a long-term employee currently earning an annual salary of $95,250 0:03:11 Required: Calculate the increase or decrease in the operating income in both alternatives. Keep Accesories Product Line Drop Accesories Product Line Sales Fixed expenses Net operating income (loss) Should the ladies' accessories product line be dropped? O Yes O NOStep by Step Solution
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