Question: M7-7 (Algo) Analyzing Keep-or-Drop Decision [LO 7-2, 7-5] Blowing Sand Company produces the Drafty model fan, which currently has a net loss of $54,000 as

M7-7 (Algo) Analyzing Keep-or-Drop Decision [LO 7-2, 7-5] Blowing Sand Company

M7-7 (Algo) Analyzing Keep-or-Drop Decision [LO 7-2, 7-5] Blowing Sand Company produces the Drafty model fan, which currently has a net loss of $54,000 as follows: Eliminating the Drafty product line would eliminate $87,000 of direct fixed costs. The $66,000 of common fixed costs would be redistributed to Blowing Sand's remaining product lines. Required: Will Blowing Sand's net operating income increase or decrease if the Drafty model is eliminated? By how much

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