Q3. Belmont Corporation has four operating divisions. The budgeted revenues and expenses for each division for 2011 are as follows: DIVISION B D Sales $630,000 $ 632,000 $960,000 $1,240,000 Cost of goods sold 550,000 620,000 765,000 925,000 Selling, general, and admin. expenses 120,000 135,000 144,000 210,000 Operating income/loss $(40,000) $(123,000) $51,000 $105,000 I Further analysis of costs reveals the following percentages of variable costs in each division: Cost of goods sold 80% 90% 85% Selling, general, and administrative expenses 50% 60% Closing down any division would result in savings of 40% of the fixed costs of that division. Top management is very concerned about the unprofitable divisions (A and B) and is considering closing them for the year. Required: a. Calculate the increase or decrease in operating income if Belmont closes Division A (10 pts). b. Calculate the increase or decrease in operating income if Belmont closes Division B (10 pts). 90% 50% 60% MacBook Air "X 5 32 R Y Q U A S D F H N C V B N M C se cm cmd