Chao, Inc., a service provider, has two divisions. The firms most recent annual contribution format segmented income statement appears below.

	Total Company			Eastern Division			Western Division
Sales	$	450,000		$	90,000		$	360,000
Variable expenses		243,000			27,000			216,000
Contribution margin		207,000			63,000			144,000
Traceable fixed expenses		100,800			46,800			54,000
Division segment margin		106,200		$	16,200		$	90,000
Common fixed expenses		72,000
Net operating income	$	34,200

If the company eliminates the Western Division and the Eastern Division sales increase by 10% as a result, how much will the companys net operating income decrease?

• $83,700

• $88,380

• $90,000

• $137,700

• $144,000