25. Erin Company currently has two divisions: Blue Division and Green Division. Given below are the operating results for last year. Since the Green 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 Green Division is dropped, how much higher or lower will Erin Company's total net operating income be for the year? *

Blue Division Green Division

Sales $3,000,000 $1,500,000

Variable Expenses 1,550,000 1,000,000

Contribution Margin 1,450,000 500,000

Fixed Expenses for the Division 550,000 300,000

Segment Margin 900,000 200,000

Allocated Corporate Fixed Expenses 500,000 250,000

Net Operating Income (Loss) $400,000 $(50,000)

It will be higher by $50,000.

It will be lower by $200,000.

It will be higher by $250,000.

It will be lower by $500,000.

None of the above.