The management of Braxton Corporation is considering dropping product J82C. Data from the company's accounting system appear below:

Sales $554,800 Variable expenses 242,000 Fixed manufacturing expenses 147,200 Fixed selling and administrative expenses 115,200

All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that 40% of the fixed manufacturing expenses and 30% of the fixed selling and administrative expenses are avoidable if product J82C is discontinued.

Required: a. What is the net operating income earned by product J82C according to the company's accounting system? Show your work. b. What would be the effect on the company's overall net operating income of dropping product J82C? Should the product be dropped? Show your work.