Question 1b is a yes or no answer.

Williams Products Inc. manufactures and sells a number of items, including school knapsacks. The company has been experiencing losses on the knapsacks for some time, as shown by the contribution format income statement below: $ 250,000 WILLIAMS PRODUCTS INC. Income Statement-School Knapsacks For the Quarter Ended June 30 Sales Variable expenses! Variable manufacturing expenses $ 70,000 Sales commissions 27,500 Shipping 7,500 Total variable expenses 105,000 145,000 Contribution margin Fixed expenses Salary of product-line manager General factory overhead Depreciation of equipment (no resale value) Advertising traceable Insurance on inventories Purchasing department 9,250 49, 450 17,500 51,150 4,000 29,8007 Total fixed expenses 161,150 Operating loss $ (16,150) "Allocated on the basis of machine-hours. Allocated on the basis of sales dollars. Discontinuing the knapsacks would not affect sales of other product lines and would have no noticeable effect on the company's total general factory overhead or total purchasing department expenses. Required: a. Compute the increase or decrease of net operating income if the Williams Products Incline is continued or discontinued. (Input all amounts as positive except Decreases in Sales, Decreases in Contribution Margin, and Net Losses which should be indicated by a minus sign.) Differe Keep Drop Operat Income School School Knapsailkapsal great (Decre Sales Variable expenses: Variable manufacturing expenses Sales commissions Shipping Total variable expenses b. Would you recommend that the Williams Products Incline be discontinued