A segment of a company reports the following loss for the year. All $140,000 of its variable costs are avoidable, and $75,000 of its fixed costs are avoidable.

Segment Income (Loss)
Sales	$ 200,000
Variable costs	140,000
Contribution margin	60,000
Fixed costs	80,000
Income (loss)	(20,000)

(a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be eliminated?

Complete this question by entering your answers in the tabs below.

• Required A
• Required B

Compute the income increase or decrease from eliminating this segment.

Segment Elimination Analysis	Continue	Eliminate	Income Increase (Decrease)
Sales	$200,000
Variable costs	140,000
Contribution margin	60,000
Fixed costs	80,000
Income (loss)	$(20,000)

• Required B

Should the segment be eliminated?

Should the segment be eliminated?