A segment of Hazard Inc. has the following data.

Sales $200,000 Variable expenses 140,000 Fixed expenses 100,000 If this segment is eliminated, what will be the effect on the remaining company? Assume that 50% of the fixed expenses will be eliminated and the rest will be allocated to the segments of the remaining company.

(a) $120,000 increase.

(c) $50,000 increase.

(b) $10,000 decrease.

(d) $10,000 increase.

AppendixLO1