Aside Corporation has four operating divisions. The budgeted revenues and expenses for each division for 2014 follows Click to view the results of each division) Closing down any division would result in savings of 40% of the red costs of that division Top Management is very concerned about the unprofitable divisions (A and B) and is considering closing them for the year CGD Requirement 1. Calculate the increase or decrease in operating income if Arts de cosas Division A Begin by calculating Division A's contribution margin Data table Division A Sales Division Variable cost of goods sold Variable saling, geni, adin e expenses Corbution margin Now, calculate the fixed cost that will be saved by losing Division A Division A Flead out of goods sold Fored nellingen and admin expenses Tatuados A B D Sales 3 830.000 $ 430 000 $ 920 000 $ 730.000 Cost of goods sold 510,000 360,000 560 000 440,000 Selling general, and administrative 140 000 120,000 265,000 190.000 5 (20,000) $ (50,000 $ ( 95.000 $100,000 Operating incomaloss Further analysis of costs reveals the following percentages of variable costs in each division Cost of goods sold 91 04 95% A0 Selling general, and administrative expenses 63% % 25% 68% OS Ficed cost saved by huling down on vis avoidable and costs. Opening income would by Aride ces Division A Divsion As contribution margin Requirement 2. Calculate the nose or decrease in operating incomot Arinid oes Division B Begin by dating Disons contribution margin Division Varicost of goods sold Variable ting online Core-bution than Now, chefred out that will be seved by closing Division Print Done Next Now, calculate the fixed costs that will be saved by closing Division B. Division B Faxed cost of goods sold Fixed selling, genl, and admin expenses Total fixed costs Foxed costs saved by shutting down division Operating income would by sit Aristide closes Division B. Division B's contribution margin vits avoidable fixed costs. Requirement 3. What other factors should the top management of Aristide consider before making a decision? O A. Management should consider the impact on the morale of the remaining employees if the division(s) are closed. O B. Management should consider the role that the divisions' product line plays relative to other product lines. OC. Both of the above OD. Neither of the above, management should make this decision relying only on financial data