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Your Retail Store's accountant prepared the following income statement for the ladies' accessories...

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Accounting

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Your Retail Store's accountant prepared the following income statement for the ladies' accessories product line Sales Less: Variable expenses $3,175,000 1,492,250 Contribution margin Less: Fixed expenses: Wages Insurance on inventory Advertising 1,682,750 $1,143,000 63,500 698,500 1,905,000 Net operating income (loss) $ (222,250) 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 $95,250. Required Calculate the increase or decrease in the operating income in both alternatives Keep Accesories Product Line Drop Accesories Product Line Sales ixed expenses Net operating income (loss) Should the ladies' accessories product line be dropped? Yes 0

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