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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
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.
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