Joma has shoes and a shirts division. The company reported the following segmented income statement for last month:

		Division
	Total	Shoes	Shirts
Sales	$4,200,000	$3,000,000	$1,200,000
Variable expenses	2,000,000	1,500,000	500,000
Contribution Margin	2,200,000	1,500,000	700,000
Fixed Expenses	2,200,000	1,300,000	900,000
Net operating income (loss)	0	200,000	(200,000)

The company predicts that $100,000 of the fixed expenses being charged to the Shirts Division are allocated costs that will continue even if the Shirts Division is eliminated. The elimination of the Shirts Division will additionally cause a 10% drop in Shoes Division sales. If the company shuts down its Shirts Division, by how much will the company's overall net operating income change?

• Decrease by $30,000

• Decrease by $70,000

• Decrease by $50,000

• Increase by $70,000