An B inc, has two divisions, the Scranton Branch and the Utica Branch. The income statement for the past month is below:

Scranton Utica Total

Sales 360,000 320,000 680,000

Variable Costs 280,000 150,000 430,000

Contribution Margin 80,000 170,000 250,000

Fixed Costs (allocated) 38,000 212,000 250,000

Profit Margin 42,000 -42,000 0

The allocated fixed costs are common and would not be avoidable. What would be the change be in the company's profit if the Utica Division was dropped?

1. Decrease by 80,000
2. Increase by 42,000
3. Decrease by 170,000
4. Increase by 80,000