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 $111,000 of its fixed costs are avoidable. The impact on Sammy's operating income from eliminating the commercial division would be: Garden Farm Sales Variable costs: Fixed costs Net income (loss) Contribution margin $ 680,000 383,900 296,100 $ 953,000 425,000 Commercial $ 725,000 660,800 528,000 64,200 258,200 346,500 291,400 37,900 181,500 (227,200)