24. Color Company currently has two divisions: North Division and South Division. Given below are the operating results for last year. Since the South Division is incurring losses, the president of the company is considering the elimination of this division. All the fixed expenses for the division will be eliminated if the division is dropped. If the South Division is dropped, how much higher or lower will Color Companys total net operating income be for the year?

a-It will be higher by $20,000.

b-It will be lower by $80,000.

c-It will be higher by $100,000.

d-It will be lower by $200,000.

e-None of the above.

Sales Variable Expenses Contribution Margin Fixed Expenses for the Division Segment Margin Allocated Corporate Fixed Expenses Net Operating Income (Loss) North Division $1,200,000 620,000 580,000 220,000 360,000 200,000 $160,000 South Division $600,000 400,000 200,000 120,000 80,000 100,000 $(20,000)