Pottery Unlimited has two product lines: cups and pitchers. Income statement data for the most recent year follow:
|
Total
|
Cups
|
Pitchers
|
|
Sales revenue
|
$460,000
|
$310,000
|
$150,000
|
|
Variable expenses
|
355,000
|
235,000
|
120,000
|
|
Contribution margin
|
105,000
|
75,000
|
30,000
|
|
Fixed expenses
|
76,000
|
38,000
|
38,000
|
|
Operating income (loss)
|
$29,000
|
$37,000
|
$(8,000)
|
If $23694 in fixed costs will be eliminated by dropping the CUP line, how will operating income be affected? If income drops, use a negative sign in front of the number.