Top 11 Exercise 9-8 Deciding Whether to Drop or Retain a Segment (L01. CC3) 10 points Your Retail Store's accountant prepared the following Income statement for the ladies accessories product line: Sales Less: Variable expenses $2.800.000 1.200,000 1.600,000 Contribution margin Less: Fixed expenses Wages $1,100,000 Insurance on Inventory 60,000 Advertising 600,000 1.760,000 Net operating Income (loss) $ 160,000) Anthon 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 $80,000. Required: Calculate the increase or decrease in the operating income in both alternatives. Answer is complete but not entirely correct. Keep Accesories Drop Accesories Product Line Product Line $ 2.800,000 1,200,000 Sales > 00 OC DO 0 S 1 600 000 > Less Variable expenses Contribution margin Fixed expenses Less Wages expenses Less Insurance on inventory expenses Less Advertising expenses Net operating income loss) $ 80,000 . 1 100 000 60.000 > >> > 00 > > 600,000 1,760 000 $ 100 000 > X 0$ 80,000 $ 80,000