Aggie Football Corporation is considering dropping product PUNT. The corporation provides you with the following data…

Aggie Football Corporation is considering dropping product PUNT.
The corporation provides you with the following data for
PUNT:

Sales

$933,000

Variable expenses
$412,000

Fixed manufacturing
expenses
$347,000

Fixed selling and administrative
expenses
$254,000

Aggie fully allocates all company fixed expenses to products in
the company’s accounting system. In addition, examination of
Aggie’s books revealed that $125,000 of the fixed selling and
administrative expenses and $214,000 of the fixed manufacturing
expenses are avoidable if product PUNT is
discontinued.
According to Aggie’s accounting system, what is the net
operating income earned by product PUNT?
$(80,000)
$521,000
$80,000
$(521,000)