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Suppose Wheatum is considering discontinuing its mallow charms product line.Assume that during the past year, the mallow charms product line income statement showed the folowing: caick th icon to view the income statement data 0 (ack e e ioon for a ditional information. If the company decides to discontinue the product line, what will happen to the company's operating income? Should Wheatum discontinue the mallow charms product line? Begin by preparing a contribution margin income statement for the mallow chams product line. (Use a minus sign or parentheses to enter a loss.) Sales revenue Less Variable expenses Contribution margin Less: Fixed expenses Operating inoome (oss) S 7,450,000 120000 1050000 1120000 (550 More Into 0 Data Table Fixed manufacturing overhead costs acount for 40% of the cost of goods. while only 30% of the operating expenses are fod Since the m allow charms ine is just one of the oompany's cereal operations, only $770,000 of direct fixed costs (the majority of which is advertising) will be eliminated the product ine is discontinued. The remainder of the fxed costs will still be incurred by the company $ 7,450,000 6,400,000 Sales revenue Less: Cost of goods sold Gross prof Less: Operating expenses Operating income (loss) 1,050,000 1,600,000 $ (550,000) Print Done