The Crater Company has two divisions--Northern and Southern. The divisions have the following revenues and expenses:

Northern Southern Sales ........................ $350,000 $300,000 Variable costs .............. 175,000 100,000 Direct fixed costs ......... 100,000 50,000 Allocated corporate costs ..... 125,000 35,000 Net income (loss) ............. (50,000) 115,000

The management of Crater is considering the elimination of the Northern Division. If the Northern Division were eliminated, the direct fixed costs associated with this division could be avoided. However, corporate costs would be the same. Given these data, the elimination of the Northern Division would result in a NEW company net income (loss) of:

Multiple Choice

$9,000

$15,000

($5,000)

($10,000)