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

SandhillIndustries 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

$551000

$321000

$831000

$1703000

Variable costs

358800

218700

681600

1259100

Contribution margin

192200

102300

149400

443900

Fixed costs

126000

131000

116000

373000

Operating income

$66200

$(28700)

$33400

$70900

Of the fixed costs, $318000 of it is common costs that have been allocated equally to each product line. What will total operating income be if Sandhill drops the retail line?

$23600

$99600

$(6400)

$77300

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