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Acct225 Integrative Case #1 Operational information Part 4 - Add or drop a product The management team of the Calgary operations expressed concerns about a different segment of the business - the boots product line - not just for their own region, but for all of the operations in Alberta and Saskatchewan. Profits have been declining due to competition for designer boots. New innovations in processing and machinery along with price increases for the high-quality materials that the company depends on are potential problems that the managers feel they have limited control over. As a result, they have asked you to conduct analysis to determine if the boot line should be retained or eliminated. The managers of the Calgary team worked with managers from the other Alberta and Saskatchewan regions to compile and consolidate financial information for the boots line through-out these regions. Dynamadics Inc. Alberta and Saskatchewan Operations Income Statement - Boots product line For the year ended December 31, 2020 Sales $ 3,200,000 Less: Variable expenses: 1,504,000 Less: Fixed expenses: Wages/salaries expenses $1,152,000 Insurance on inventory 64,000 Advertising expense 704,000 $1,920,000 Net operating income (loss) $(224,000) If these regions determine that the boots line should be dropped, only one employee will be retained to support continued operations in other product lines. The employee currently earns an annual salary of $96,000. Requirement #4 (4 marks) Should the boot line be eliminated? Support your response with the required analysis