The manager of the division is surprised that the T205 product line is not profitable. The division accountant estimates that dropping the T205 product line will decrease fixed cost of goods sold by $75,000 and decrease fixed selling and admistrative expenses by $10,000.

Prepare a differential analysis to show whether Division B should drop the T205 product line. (Use excel format below to answer)

What is your recommendation to the manager of Division B?

Requirement 2(a) Expected decrease in revenue Expected decrease in total variable costs Expected decrease in fixed costs Expected decrease in total costs Expected decrease in operating income DIVISION B OF DILLARD, INC. Income Statement For the Year Ended December 31, 2024 Product Line Net Sales Revenue \begin{tabular}{cccc} \hline T205 & B179 & Total \\ \hline$310,000 & $360,000 & $670,000 \end{tabular} Cost of Goods Sold: Variable Fixed Total Cost of Goods Sold Gross Profit Selling and Administrative Expenses: Variable Fixed Total Selling and Administrative Expenses Operating Income (Loss) \begin{tabular}{rrr} 31,000 & 44,000 & 75,000 \\ 275,000 & 67,000 & 342,000 \\ \hline 306,000 & 111,000 & 417,000 \\ \hline 4,000 & 249,000 & 253,000 \end{tabular} \begin{tabular}{rrr} 68,000 & 80,000 & 148,000 \\ 47,000 & 27,000 & 74,000 \\ \hline 115,000 & 107,000 & 222,000 \\ \hline$(111,000) & $142,000 & $31,000 \\ \hline \hline \end{tabular}