Williams Products Inc. manufactures and sells a number of items, including school knapsacks. The company has been experiencing losses on the knapsacks for some time, as shown by the contribution format income statement below:

WILLIAMS PRODUCTS INC.
Income StatementSchool Knapsacks
For the Quarter Ended June 30
Sales				$	270,000
Variable expenses:
Variable manufacturing expenses	$	75,600
Sales commissions		29,700
Shipping		8,100
Total variable expenses					113,400
Contribution margin					156,600
Fixed expenses:
Salary of product-line manager		10,250
General factory overhead		53,650	*
Depreciation of equipment (no resale value)		20,000
Advertisingtraceable		52,550
Insurance on inventories		4,400
Purchasing department		31,720
Total fixed expenses					172,570
Operating loss				$	(15,970	)

*Allocated on the basis of machine-hours. Allocated on the basis of sales dollars. Discontinuing the knapsacks would not affect sales of other product lines and would have no noticeable effect on the companys total general factory overhead or total purchasing department expenses.

Required: a. Compute the increase or decrease of net operating income if the Williams Products Inc line is continued or discontinued. (Input all amounts as positive except Decreases in Sales, Decreases in Contribution Margin, and Net Losses which should be indicated by a minus sign.) Keep School Drop School Knapsack Knapsack Difference: Operating Income Increase or (Decrease) 0 0 0 Sales Variable expenses: Variable manufacturing expenses Sales commissions Shipping Total variable expenses Contribution margin Fixed expenses: Salary of product-line manager General factory overhead Depreciation of equipment Advertising-traceable Insurance on inventories Purchasing department Total fixed expenses Operating loss 0 0 0 $ 0 $ 0 $ 0