Your Retail Stores accountant prepared the following income statement for the ladies accessories product line:

Required:

1) Calculate the increase or decrease in the operating income in both alternatives.

2) Should the shoe department be dropped?

A. Yes

B. No

Your Retail Store's accountant prepared the following income statement for the ladies' accessories product line: 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 $80,000. Required: Calculate the increase or decrease in the operating income in both alternatives