1. Assume a retailing company has two departmentsDepartment A and Department B. The companys most recent contribution format income statement follows:

   	Total			Department A						Department B
   Sales	$	800,000			$	350,000					$	450,000
   Variable expenses		350,000				250,000						100,000
   Contribution margin		450,000				100,000						350,000
   Fixed expenses		400,000				140,000						260,000
   Net operating income (loss)	$	50,000			$	(40,000	)				$	90,000

   The company says that $60,000 of the fixed expenses being charged to Department A are sunk costs or allocated costs that will continue if the segment is discontinued. However, if Department A is discontinued the sales in Department B will drop by 18%. What is the financial advantage (disadvantage) of discontinuing Department A?

   		$(83,000)
   		$(103,000)
   		$(92,000)
   		$(101,000)