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Larry Inc. has two divisions, A and B. The income statement of the previous year is as follows: A B Total Sales $ 560,200 $

Larry Inc. has two divisions, A and B. The income statement of the previous year is as follows:

A B Total
Sales $ 560,200 $ 336,300 $ 896,500
Variable Costs 176,300 174,200 350,500
Contribution Margin 383,900 162,100 546,000
Fixed Costs (allocated) 284,575 170,925 455,500
Operating Income $ 99,325 $ (8,825 ) $ 90,500

Assuming fixed costs are unavoidable, how much would Larrys operating income be if Division B was dropped?

  • $383,900 profit

  • $71,600 loss

  • $90,500 profit

  • $99,325 profit

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