Your Retail Store's accountant prepared the following income statement for the ladies' accessories product line: Sales $ 3,025,000 Less: Variable expenses 1,421,750 Contribution margin 1,603,250 Less: Fixed expenses: Wages $ 1,089,000 Insurance on inventory 60,500 Advertising 665,500 1,815,000 Net operating income (loss) $ (211,750 ) 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 $90,750. Required: Calculate the increase or decrease in the operating income in both alternatives. Should the ladies' accessories product line be dropped? Contribution margin Keep Accesories Product Line Drop Accesories Product Line Sales Less: Variable expenses Contribution margin Fixed expenses Less: Wages expenses Less: Insurance on inventory expenses Less: Advertising expenses Net operating income (loss)