Sammy Company is considering eliminating its commercial division. The company allocates fixed costs based on division sales. If the commercial division is dropped, $113,000 of the fixed costs allocated to it could be eliminated. The impact on Sammys operating income from eliminating the commercial division would be:

	Garden				Farm				Commercial
Sales	$	684,000			$	959,000			$	731,000
Variable costs		385,900				427,000				662,800
Contribution margin		298,100				532,000				68,200
Fixed costs		260,200				348,500				300,400
Net income (loss)		37,900				183,500				(232,200	)

Sammy Company is considering eliminating its commercial division. The company allocates fixed costs based on division sales. If the commercial division is dropped, $113,000 of the fixed costs allocated to it could be eliminated. The impact on Sammy's operating income from eliminating the commercial division would be: Sales Variable costs Contribution margin Fixed costs Net income (loss) Garden $684,000 385,900 298, 100 260,200 37,900 Farm $959,000 427,000 532,000 348,500 183,500 Commercial $ 731,000 662,800 68,200 300,400 (232, 200) Multiple Choice $6,200 decrease $9,000 increase $44,800 increase $44,800 decrease $27,000 increase