Cost Accounting - Please kindly help answer (2) blanks with shown work! thanks!!

Keep-or-Drop Decisions

Example: Ginger Company makes three types of microwave ovens. Basic is the small 0.7 cubic foot model sold at discount stores. Countertop is a larger (1.2 cubic foot) model with more advanced features. Built-in is a model designed to fit into cabinetry and is sold through appliance stores. A segmented income statement is shown below.

	Basic	Countertop	Built-In	Total
Sales	$203,920	$864,930	$735,170	$1,804,020
Variable COGS	184,360	301,780	351,990	838,130
Commissions	5,830	44,125	36,065	86,020
Contribution margin	$13,730	$519,025	$347,115	$879,870
Separable fixed expense	29,085	75,715	175,630	280,430
Segment margin	$(15,355)	$443,310	$171,485	$599,440
Common fixed expenses:
Factory overhead				216,890
Selling and administrative expense				290,570
Operating income				$91,980

Ginger Company believes the basic model is a concern and is considering a number of options to deal with this situation. One possibility is to drop the Basic line. If that is done, operating income will be $**BLANK** higher

After further study, Ginger Company has found that if the Basic Model is dropped, sales of the Countertop model will decrease by 5 percent as some stores prefer to order only from a company with both basic and countertop models. Now if the Basic line is dropped, operating income will be $**BLANK**lower than if the Basic line is kept. (round to nearest dollar).