Microsoft Corporation has two departments, Toys and Candy. The company's most recent monthly contribution format income statement follows

Department

Total

Toys

Candy.

$4.200,000

$3,000,000

$1,200,000

Sales

Variable expenses

Contribution Margin

Fixed Expenses

Net operating income (loss)

2,000,000

1500.000

500,000

2,200,000

1,500,000

700,000

2,200;000

1.300.000

900,000

O

200,000

(200,000)

A Microsofts study indicates thal100,000 of the fixed expenses being charged to the Candy Department are sunk costs or allocated costs I will continue even if the Candy Department is dropped. In addition, the elimination of the Candy Department will result in a 30% decrease in the se of the Toys Department.

Q) If the Candy Department is dropped, what will be the effect on the net operating income of the Microsofts Corporation as a whole?