Electronic Media Manufactures DVDs and Blu-Ray Products Management Is Considering Dropping the DVD Product Line

Electronic Media manufactures DVDs and Blu-ray products.The company's product line income statement follows:
$\begin{array}{|l|r|r|r}\hline&\text { Blu-ray } & \text { DVDs } & \text { Total } \\\hline \text { Sales revenue } & \$ 350,000 & \$ 112,000 & \$ 462,000 \\\hline \text { Cost of goods sold } & & & \\\hline \quad \text { Variable } & \$ 75,000 & \$ 49,000 & \$ 124,000 \\\hline \text { Fixed } & \$ 82,000 & \$ 28,000 & \$ 110,000 \\\hline \text { Total cost of goods sold }& \$ 157,000 & \$ 77,000 & \$ 234,000 \\\hline \text { Gross profit } &\$193,000&\$35,000&\$228,000 \\\hline \text { Marketing and administrative expenses } \\\hline \text { Variable } & \$ 25,000 & \$ 28,000 & \$ 53,000\\\hline \quad \text { Fixed } & \$ 32,000 & \$ 19,000 & \$ 51,000 \\\hline \text { Total marketing and administrative expenses }& \$ 57,000 & \$ 47,000 & \$ 104,000 \\\hline \text { Operating income (loss) }& \$ 136,000 & \$(12,000) & \$ 124,000\\\hline\end{array}$ Management is considering dropping the DVD product line.Accountants for the company estimate that dropping the DVD line will decrease fixed cost of goods sold by $8,000 and fixed marketing and administrative expenses by $2,000.
Prepare an analysis supporting your opinion about whether or not the DVD product line should be dropped.