Modern Company has four divisions. The budgeted revenues and expenses for each division for 2021 follows:

	Division
	A	B	C	D
Sales	$504,000	$948,000	$960,000	$1,240,000
Cost of goods sold	440,000	930,000	765,000	925,000
Selling & admin costs	96,000	202,500	144,000	210,000
Operating income (loss)	$(32,000)	$(184,500)	$51,000	$105,000

Further analysis of costs reveals the following percentages of variable costs in each division:

	A	B	C	D
Cost of goods sold	90%	80%	90%	85%
Selling & admin costs	50%	50%	60%	60%

Closing down any division would result in a savings of 40% of the fixed costs of that division.

Required:

1. Calculate the increase or decrease in operating income if Modern Company closes division B using the below table:

Item

2. What factors should the top management of Modern Company consider before making a decision.