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6. The Scrooge and Marley Manufacturing Co. have two product lines, power tools and hand...

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6. The Scrooge and Marley Manufacturing Co. have two product lines, power tools and hand tools. The following income statement highlights the result of operations for the previous year. Power Hand Total Tools Tools Sales 1,377,500 928,000 449,500 Cost of Goods Sold Variable 246,500 139,200 107,300 Fixed 203.000 130.500 72.500 Total Cost of Goods Sold 449,500 269,700 179,800 Gross Margin 928,000 658,300 269.700 Selling and Administrative Costs: Variable 594,500 389,760 204,740 Fixed 217.500 119.600 97.900 Total Selling and Administrative Costs 812.000 309,360 302.640 Operating Income (Low) $116.000 $148,940 $32.940) Scrooge, the owner of the company is considering deleting the hand tools product line. The accountants for the company estimate that dropping the hand tools product line will save $62,800 in Fixed Cost of Goods Sold. Sales of power tools are expected to increase by S125,000. However, in order to achieve the additional sales, Fixed Selling and Administrative expenses increase by $10,400 Required: Compute operating Income AFTER deleting the hand tool product line

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