16

The Alligator segment of Cullumber Specialty Meats is operating at a loss and has the following data:

Sales	$504000
Variable expenses	352800
Fixed expenses	252000

If the Alligator 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.

$302400 increase.

$25200 decrease.

$126000 increase.

$25200 increase.