Samwise Corporation is a retailer of high-tech products known for their excellent quality and innovation. Recently, the firm conducted a relevant cost analysis of one of its product lines that has only two products, S-25 and S-50. The sales for S. 50 are decreasing and the purchase costs are increasing. The firm might drop S-25 and sell only S-50. Samwise allocates fixed costs to products on the basis of sales revenue. When the president of Samwise saw the income statements (see below), he agreed that S-50 should be dropped. If S-50 is dropped, sales of S- 25 are expected to increas by 10 percent next year, but the firm's cost structure will remain the same. Required: 1. Find the expected change in annual operating income (rounded to the nearest whole dollar) by dropping S50 and selling only S-25. 2. By what percentage (rounded to two decimal places) would sales from S-25 have to increase in order to make up the financial loss from dropping S-50? (Rounding example: 56.568%=56.57%.) 3. What is the required \% increase in sales (rounded to two decimal places) from S25 to compensate for lost margin from S.50 if total ficed costs can be reduced by $45,000 ? 4. What strategic factors should be considered in deciding whether S50 should be dropped? Samwise Corporation is a retailer of high-tech products known for their excellent quality and innovation. Recently, the firm conducted a relevant cost analysis of one of its product lines that has only two products, S-25 and S-50. The sales for S. 50 are decreasing and the purchase costs are increasing. The firm might drop S-25 and sell only S-50. Samwise allocates fixed costs to products on the basis of sales revenue. When the president of Samwise saw the income statements (see below), he agreed that S-50 should be dropped. If S-50 is dropped, sales of S- 25 are expected to increas by 10 percent next year, but the firm's cost structure will remain the same. Required: 1. Find the expected change in annual operating income (rounded to the nearest whole dollar) by dropping S50 and selling only S-25. 2. By what percentage (rounded to two decimal places) would sales from S-25 have to increase in order to make up the financial loss from dropping S-50? (Rounding example: 56.568%=56.57%.) 3. What is the required \% increase in sales (rounded to two decimal places) from S25 to compensate for lost margin from S.50 if total ficed costs can be reduced by $45,000 ? 4. What strategic factors should be considered in deciding whether S50 should be dropped