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Your Retail Store's accountant prepared the following income statement for the ladies' bocessories Product line: Sales Less Variable expenses $3,000,000 1.410,000 1590,000 Contribution margin Less:

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Your Retail Store's accountant prepared the following income statement for the ladies' bocessories Product line: Sales Less Variable expenses $3,000,000 1.410,000 1590,000 Contribution margin Less: Fixed expenses Wages Insurance on inventory Advertising $1,080,000 60.000 650,000 1,800,000 $ 210,000) 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 $90 000. 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)

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