222000 dec

99000 dec

Carns Company is considering eliminating its Small Tools Division, which reported a loss for the prior year of $85,000 as shown below. Segment Income (Loss) Sales $ 1,310,000 Variable costs 1,175,000 Contribution margin 135,000 Fixed costs 220,000 Income (loss) $ (85,000) If the Small Tools Division is dropped, all of its variable costs are avoidable, and $99,000 of its fixed costs are avoidable. The impact on Carns's income from eliminating the Small Tools Division would be: Multiple Choice $36,000 increase $36,000 decrease O. $74,200 decrease