Texts: Wildhorse Industries manufactures light fixtures for home, retail, and industrial customers. The retail line has been showing losses for several years, and management is considering dropping the line. Recent income statements have been very similar to the following information, which was prepared for the most recent year:
Home Retail Industrial Total
Sales $551,100 $321,100 $831,100 $1,703,300
Variable costs $358,400 $219,000 $681,400 $1,258,800
Contribution margin $192,700 $102,100 $149,700 $444,500
Fixed costs $126,100 $131,100 $116,100 $373,300
Operating income $66,600 $(-29,000) $33,600 $71,200
Of the fixed costs, $318,300 of it is common costs that have been allocated equally to each product line. What will total operating income be if Wildhorse drops the retail line?
A) $77,100
B) $24,100
C) $(-5,900)
D) $100,200