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Your Retail Store line accountant prepared the following income statement for the ladies accessories produce Sales Less: Variable expenses 93,050,000 1 433 500 1616 500
Your Retail Store line accountant prepared the following income statement for the ladies accessories produce Sales Less: Variable expenses 93,050,000 1 433 500 1616 500 Contribution margin Less: Fixed expenses Wages Insurance on inventory Advertising $1 098,000 61,000 671.000 1830,000 $ (213,500) Net operating income (loss) 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 $91,500 Required: Calculate the increase or decrease in the operating income in both alternatives Keep Accesories Product Line Drop Accesories Product Line xed expenses Net operating inceme (loss)
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