Agua Inc. makes deep sea two-stage submersible pods for oceanic deep sea exploration and has two segments, Alloy and Stainless. Additional information:

	Alloy				Stainless			Total
Sales	$	362,700			$	322,400		$	685,100
Variable Costs		282,700				152,300		$	435,000
Contribution Margin	$	80,000			$	170,100		$	250,100
Fixed Costs (allocated)		119,200				130,900		$	250,100
Profit Margin	$	(39,200	)		$	39,200		$	0

What would Auga's profit margin be if the Alloy division was dropped and all fixed costs are unavoidable Allocated costs can not be reduced if Alloy was shut down. If the Company shuts down Alloy - income would be?

1. $0 2. $80,000 loss 3. $39,200 profit 4. $80,000 profit