1. Mr. Joy's Company has 3 divisions: R, S, and T. Division R's income statement shows the following for the year ended December 31:

Sales

Cost of goods sold Gross profit

Selling expenses Administrative expenses Net loss

P100,000 250,000

P1,000,000 (800,000) P 200,000

(350,000) P (150,000)

Cost of goods sold is 75 percent variable and 25 percent fixed. Of the fixed costs, 60 percent are avoidable if the division is closed. All of the selling expenses relate to the division and would be eliminated if Division R were eliminated. Of the administrative expenses, 90 percent are applied from corporate costs. If Division R were eliminated, Mr. Joy's income would [ANSWER USING THIS FORMAT: increase/decrease by _____]