Answer:
Overall net income will decrease by $34,000.
Explanation:
Calculation to determine net operating income
Using this formula formula
Net operating income=Contribution margin -Avoidable costs
Where,
Contribution margin =$124,000
Avoidable costs= Salaries $60,000
+Advertising $20,000+Administrative expenses $10,000
Let plug in the formula
Net operating income=$124,000-($60,000+$20,000+$10,000)
Net operating income=$124,000-$90,000
Net operating income=$34,000 Decrease
Therefore If this product line is dropped overall net operating income will:decrease by $34,000
