Beta Company has two divisions, Wizards and Wands. Beta is considering discontinuing Wands, due to the division's continuing operating losses. Beta's current income statement is presented below. If Wands is discontinued, all employees of the division will be laid off. Factory rent and general expenses are allocated based on sales dollars and are not directly related to individual product lines. Total Wizards $ 1,000,000 $ 800,000 $ 500,000 350,000 $ 500,000 $ 450,000 $ Wands 200,000 150,000 50,000 Sales Variable manufacturing and selling expenses Contribution Margin Fixed Expenses: Factory rent Product line managers' salaries General expenses Total fixed expenses Net operating income (loss) $ 50,000 $ 40,000 100,000 60,000 90,000 67,500 240,000 $ 167,500 $ 260,000 $ 282,500 $ 10,000 40,000 22,500 72,500 ($22,500) TATA The financial advantage (disadvantage) of discontinuing Wands is: 0 $ 40,000 O ($17,500) $ 22,500 ($10,000)