Granfield Company Is Considering Eliminating Its Backpack Division,which Reported an Operating

Granfield Company is considering eliminating its backpack division,which reported an operating loss for the recent year of $42,000.The division sales for the year were $960,000 and the variable costs were $475,000.The fixed costs of the division were $527,000.If the backpack division is dropped,40% of the fixed costs allocated to that division could be eliminated.The impact on Granfield's operating income for eliminating this business segment would be:

A) $485,000 decrease
B) $210,800 increase
C) $274,200 decrease
D) $485,000 increase
E) $274,200 increase

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