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Jamie Rogers operates a small grocery store with three divisions: Floral, Groceries, and Meats. During the most recent period the company accountant reported the following

Jamie Rogers operates a small grocery store with three divisions: Floral, Groceries, and Meats. During the most recent period the company accountant reported the following results:

Floral

Groceries

Meat

Total

Sales

$1,500,000

$2,300,000

$2,900,000

$6,700,000

Variable Costs

1,400,000

1,800,000

2,400,000

5,600,000

Fixed Costs

400,000

200,000

300,000

900,000

Income

-$300,000

$300,000

$200,000

$200,000

Assume that if the Floral Department is closed sales in groceries will decrease by 10% and 25% of the fixed costs now allocated to the Floral Department will be saved. Under these conditions what will be the effect on income if the Floral Department is closed?

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