A company has three locations. The income statements for the most recent accounting period are shown below:

	Avon	Berlin	Portland
Sales	$750,000	$250,000	$550,000
Variable costs	$450,000	$187,500	$330,000
Contribution Margin	$300,000	$62,500	$220,000
Traceable(direct) Fixed Costs	$60,000	$20,000	$44,000
Allocated Fixed costs	$165,000	$55,000	$121,000
Operating Income	$75,000	($12,500)	$55,000

If the Berlin location closes 80% of the Berlin business will go to the Avon location. The Avon locations traceable (direct) fixed costs will increase by $15,000. if they take over the Berlin business.

1. Given these assumptions, what is the financial impact for the company as a whole if Berlin is eliminated.

2. In addition, in your answer make sure to indicate whether the financial impact would be an increase or decrease in operating income.