Saved Barbour Corporation, located in Buffalo, New York, is a retailer of high-tech products and is known for its excellent quality and innovation. Recently, the firm conducted a relevant cost analysis of one of its product lines that has for T-2 are decreasing and the purchase costs are increasing. The firm might drop T-2 and sell only T-1 that has iow ut1 and T2 The Barbour allocates fixed costs to products on the basis of sales revenue. When the president of Barbour saw the income stateme (see below) he agreed thatT2 should topped. If T 2 is dropped sales firm's cost structure will remain the same of T-1 are expected to increase by 10% next year, but the Sales Variable costs: Cost of goods sold Selling & administrative Contribution margin Fixed expenses: Fixed corporate costs Fixed selling and administrative Total fixed expenses $218,600 $268,809 72,890 22,509 134,600 115,52,000 82,00 62,080 14,000 5 76,6e9 $109,869 $ 39,58e (18,800) 77,009 Operating income Required: 1. Find the expected change in annual operating income by dropping T-2 and selling only T-1 2 By what percentage would sales from T-1have to increase in order to make up the financial loss from dropping T-2? (Enter your answer as a percentage rounded to 2 decimal places (i.e. 0.1234 should be entered as 12.34).) 3. What is the required percentage increase in sales from T-1 to compensate for lost margin from T-2, if total fxed costs can be reduced by $42,500? (Enter your answer os a percentage rounded to 2 decimal places (ie. 0.1234 should be entered as 12.34).1 2 Required % increase in sales of T-1 Required % increase in sales from T-1 3