Sammy Company is considering eliminating its Commercial division. The company allocates fixed costs based on division sales. If the Commercial division is droppped, $100,000 of its fixed costs are avoidable. As a consequence of dropping the Commercial division, Sammys total income would be:

	Garden	Farm	Commercial
Sales	$ 678,000	$ 920,000	$ 692,000
Variable costs	372,900	414,000	649,800
Contribution margin	305,100	506,000	42,200
Fixed costs	247,200	335,500	252,400
Net income (loss)	57,900	170,500	(210,200)

Multiple Choice

a. $18,200

b. $228,400

c. $76,000

d. $118,200

e. $57,800