Anderson Document Services, a document creation and copying company, has two departments, Design and Copying. The company's most recent monthly contribution format income statement follows: Department Sales Variable expenses Total Design Copying $455,000 $120,000 $335,000 279,000 78,000 201,000 42,000 Contribution margin Fixed expenses 176,000 76,080 134,000 28,530 47,550 Operating income (loss) $ 99,920 $ (5,550) $ 105,470 A study indicates that $21,875 of the fixed expenses being charged to the Design Department are sunk costs or allocated costs that will continue even if the Design Department is dropped. In addition, the elimination of the Design Department would result in a 5% decrease in the sales of the Copying Department. Required: a. If the Design Department is dropped, what will be the effect on the operating income of the company as a whole? Operating income by b. Should the Design department be dropped? Yes No