The company predicts that $150,000 of the fixed expenses being charged to the Shirts Division are allocated costs that will continue even if the Shirts Division is eliminated. The elimination of the Shirts Division will additionally cause a 20% drop in

Shoes Division sales. If the company shuts down Its Shirts Division, by how much will the company's overall net operating income change?

Spring 2022 Saved ACE-749 Inc. has a shoes and a shirts division. The company reported the following segmented income statement for last month: Division Total Shoes Shirts Sales $4,200,000 $3,000,000 $1,200,000 Variable expenses 2,000,000 1,500,000 500,000 Contribution Margin 2,200,000 1,500,000 700,000 Fixed Expenses 2,200,000 1,300,000 900.000 Net operating income (loss) 0 200,000 (200,000) The company predicts that $150,000 of the fixed expenses being charged to the Shirts Division are allocated costs that will continue Shoes Division sales. If the company shuts down its Shirts Division, by how much will the company's overall net operating income cha