Consider the Following Portion of a Segmented Income Statement for the Year

Consider the following portion of a segmented income statement for the year just ended.Assume that the fixed expenses of Division X include $30,000 of direct expenses and that the discontinuance of the department will not affect the sales of the other departments nor reduce the common expenses. $\begin{array}{lr}&\text { Division } X\\\text { Sales } & \$ 100,000 \\\text { Variable manufacturing costs } & \$ 60,000 \\\text { Gross profit } & \$ 40,000\\\text {Fixed expenses (direct and allocated) }&50,000\\\text {Operating income (loss) }&\$(10,000) \end{array}$ What would be the effect on the firm's operating income if Division X were discontinued?

A) decrease $10,000
B) increase $10,000
C) decrease $40,000
D) decrease $100,000

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