Carns Company is considering eliminating Its Small Tools Division, which reported a loss for the prior year of $115,000 as shown below. Sales Variable costs Contribution margin Fixed costs Income (loss) Segment Income (Loss) $ If the Small Tools Division is dropped, all of its variable costs are avoidable, and $112,500 of Its fixed costs are avoidable. The Impact on Carns's income from eliminating the Small Tools Division would be: Multiple Choice O O O $47,500 decrease $22,500 decrease $250,000 decrease $22,500 increase 1,340,000 1,205,000 135,000 250,000 $ (115,000) O $112.500 decrease

Carns Company is considering eliminating its Smail Tools Division, which reported a loss for the prior year of $115.000 as shown below. If the Small Tools Division is dropped, all of its varlable costs are avoldable, and $112,500 of its fixed costs are avoidable. The impact on Carns's income from eliminating the Small Tools Division would be: Multiple Choice $47.500 decrease $22,500 decrease $250,000 decrease $22500 increase $112500 decrease