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Saved Your Retail Store's accountant prepared the following income statement for the ladies' accessories product line: Sales Less: Variable expenses Contribution margin Less: Fixed expenses:
Saved Your Retail Store's accountant prepared the following income statement for the ladies' accessories product line: Sales Less: Variable expenses Contribution margin Less: Fixed expenses: Wages Insurance on inventory Advertising Net operating income (loss) $3,175,000 1,492,25e 1,682,750 $1,143,000 63,500 698,500 1,905,000 $ (222,250) Management is concerned about the loss and is considering dropping the product line. If the product line is dropped. a job has to be created elsewhere for a long-term employee currently earning an annual salary of $95.250 Required: Calculate the increase or decrease in the operating income in both alternatives. Keep Accesories Product Line Drop Accesories Product Line Sales Fixed expenses Net operating income (los)
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