Sammy Company is considering eliminating its Commercial division. The company allocates fixed costs based on division sales. If the Commercial division is dropped, all of its variable costs are avoidable, and $100,000 of its fixed costs are avoidable. The impact on Sammys operating income from eliminating the commercial division would be:

GardenFarmCommercialSales$ 678,000$ 920,000$ 692,000Variable costs372,900414,000649,800Contribution margin305,100506,00042,200Fixed costs247,200335,500252,400Net income (loss)57,900170,500(210,200)

Select one:

a. $57,800 increase

b. $45,000 increase

c. $57,800 decrease

d. $15,000 increase

e. $10,200 decrease