Mels Diner Mel's Diner owns a single restaurant, which has a cantina primarily used to seat patrons while they wait on their tables. The company is considering eliminating the cantina. Segmented contribution income statements are as follows and fixed costs applicable to both segments are allocated on the basis of square footage. Registrant Sales $800,000 Variable costs 475,000 Direct fixed costs 50,000 Allocated fixed costs 212,500 Net income s @2509 thm $200,000 160,000 15,000 37,500 lg 12,5QQ) m $1,000,000 635,000 65,000 250,000 M What effect will occur if Mel's Diner eliminates the cantina if there is no effect on restaurant sales? 9.0.03? Net income will increase by $12,500. Net income will decrease to $37,500. Net income will decline by $25,000. Net income will be $62,500