A company operates two divisions: A and B. The divisional income statements are as follows: A B Total Sales $ 500,000 $ 700,000 $ 1,200,000 Variable expenses 300,000 500,000 800,000 Contribution margin 200,000 200,000 400,000 Fixed expenses 100,000 250,000 350,000 Net income $ 100,000 $ (50,000) $ 50,000 Elimination of Division B will increase Division A sales by 20.0%. Of the toatal Division B fixed costs, $80,000 represent depreciation and other allocated costs. Company management expects the remining Division B fixed costs will be eliminated. Compute the income effect of dropping Division B Income will increase $10,000 Income will decrease $80,000 Income will increase $70,000 O Income will increase $90,000 Company Z incurs $100,000 in joint costs to covert raw material into Xelium. The company can use Xelium to produce one of three products: A, B, and C. The Xelium planned for use when making the three final product has the following sales value at split-off: A = $100,000, B = $120,000, and C = $66,000. After additional processing, the final products can be sold for: A = $150,000, B = $180,000, and C = $100,000. Additional processing costs (AFTER split-off) costs are: A = $40,000, B = $50,000, and C = $60,000. Compute the change in income from the sale of Xelium at split-off and the optimal income from additional processing (as necessary) Income decrease $6,000 No change in income Income increase $10,000 Income increase $20,000 None of the other answers are correct