Sammy Company Is Considering Eliminating Its Commercial Division A)$10,200 Decrease
B)$45,000 Increase
C)$57,800 Increase
D)$15,000 Increase
E)$57,800 Decrease

Sammy Company is considering eliminating its commercial division.The company allocates fixed costs based on division sales.If the commercial division is dropped,$100,000 of the fixed costs allocated to it could be eliminated.The impact on Sammy's operating income from eliminating the commercial division would be: $\begin{array}{lcrrr}& \text { Garden } & \text { Farm } & \text { Commercial } \\\text { Sales } & \$ 678,000 & \$ 920,000 & \$ 692,000 \\\text { Variable costs } & 372,900 & 414,000 & 649,800 \\\hline \text { Contribution margin } & 305,100 & 506,000 & 42,200 \\\hline\text { Fixed costs } & 247,200 & 335,500 & 252,400\\\text{Net income (loss) }&57,900&170,500&(210,200) \end{array}$

A) $10,200 decrease
B) $45,000 increase
C) $57,800 increase
D) $15,000 increase
E) $57,800 decrease

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