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.
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