Sammy Company is considering eliminating its commercial division. The company allocates foed costs based on division sales. If the commercial division is dropped, $100,000 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 $678,000 372,900 305,100 247,200 57,900 Farm $920,000 414,000 506,000 335,500 170,500 Commercial $ 692,000 649,800 42,200 252,400 (210,200) $10,200 decrease 45.000 increase S57,800 increase () S15,000 increase $57,800 decrease Granfield Company has a piece of manufacturing equipment with a book value of $40,000 and a remaining useful life of four years. At the end of the four years the equipment will have a zero salvage value. The market value of the equipment is currently $22,000. Granfield can purchase a new machine for $120,000 and receive $22,000 in return for trading in its old machine. The new machine will reduce variable manufacturing costs by $19,000 per year over the four-year life of the new machine. The total increase or decrease in net income by replacing the current machine with the new machine (ignoring the time value of money) is: Saved Multiple Choice $22000 decrease $76,000 increase $18,000 decrease $52,000 increase $22.000 increase