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Your Retail Store's accountant prepared the following income statement for the ladies' accessories product line: Sales Less: Variable expenses $2,950,000 1,386,500 1,563,500 Contribution margin Less:

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Your Retail Store's accountant prepared the following income statement for the ladies' accessories product line: Sales Less: Variable expenses $2,950,000 1,386,500 1,563,500 Contribution margin Less: Fixed expenses: Wages Insurance on inventory Advertising $1,062,000 59,000 649,000 1,770,000 Net operating income (loss) $ (206,500) 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 $88,500 Required: Calculate the increase or decrease in the operating income in both alternatives. Keep Accesories Product Line Drop Accesories Product Line Sales Fixed expenses

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