Question 4 Cinrich els computer equipment and home office furniture. Currently the furniture product line takes up approximately 50 percent of the company's retail floor space. The president of Cinrich is trying to decide whether the company should continue offering furniture or concentrate on computer equipment. Below is a product line income statement for the company. If furniture is dropped, salaries and other direct foed costs can be avoided. In addition, sales of computer equipment can increase by 13 percent without affecting direct fixed costs. Allocated fixed costs are assigned based on relative sales. Computer Home Office Equipment Furniture Total $1,405,000 $1,081,850 $2,486,850 Less cost of goods sold 913,250 786,800 1,700,050 Contribution margin 491,750 295,050 786,800 Less direct fixed costs: Salaries 172,113 172,113 344,226 Other 59,010 59,010 118,020 Les allocated faced costs 13,930 10,681 24,611 Insurance 3,120 2,594 5,714 Cleaning 4,080 3,255 7,335 President's salary 69,520 62,227 131,747 Or 6,470 5.530 12.000 Niet income/class) $163,507 $120,360) $143,147 Determine whether Circh should discontinue the furniture line and the financial benefit (cost) of dropping Net Income without Home Office Furniture is the Home Office Furniture product line The company should drop should be indiferent between droping or not dropping should not drop Question Attempts of 1 used SAVE FOR LATER SUBRIT