Your Retail Store's accountant prepared the following income statement for the ladies' accessories product line: $2,850,000 1,339,500 1,510, 500 Sales Less: Variable expenses Contribution margin Less: Fixed expenses: Wages Insurance on inventory Advertising Net operating income (loss) $1,026,000 57,000 627,000 1,710,000 $ (199,500) Management is concerned about the loss and is considering dropping the product line. If the product line is dropped, a has to be created elsewhere for a long-term employee currently earning an annual salary of $85,500. Required: Calculate the increase or decrease in the operating income in both alternatives. Keep Accesories Product Line Drop Accesories Product Line Sales Fixed expenses Net operating income (loss) Should the ladies' accessories product line be dropped? O Yes O No Your Retail Store's accountant prepared the following income statement for the ladies' accessories product line: $2,850,000 1,339,500 1,510, 500 Sales Less: Variable expenses Contribution margin Less: Fixed expenses: Wages Insurance on inventory Advertising Net operating income (loss) $1,026,000 57,000 627,000 1,710,000 $ (199,500) Management is concerned about the loss and is considering dropping the product line. If the product line is dropped, a has to be created elsewhere for a long-term employee currently earning an annual salary of $85,500. Required: Calculate the increase or decrease in the operating income in both alternatives. Keep Accesories Product Line Drop Accesories Product Line Sales Fixed expenses Net operating income (loss) Should the ladies' accessories product line be dropped? O Yes O No