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Dalton Co. follows a policy of allocating all common costs equally among its profit centers. A partial responsibility income statement for a typical month is

Dalton Co. follows a policy of allocating all common costs equally among its profit centers. A partial responsibility income statement for a typical month is shown below:

Dalton Co. Profit Center 1 Profit Center 2 Profit Center 3
Responsibility margins $ 203,000 $ 81,000 $ 71,000 $ 51,000
Common fixed costs $ 167,700 $ 55,900 $ 55,900 $ 55,900
Income from operations $ 35,300 $ 25,100 $ 15,100 $ (4,900 )

After evaluating these data, Dalton Co. decides to close Profit Center 3. This action eliminates all revenue, variable costs, and fixed costs traceable to Center 3, but eliminates only $35,800 in common fixed costs. Closing Profit Center 3 has no effect upon the responsibility margins of Centers 1 and 2.

Closing Profit Center 3 should cause Dalton's monthly operating income to:

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