The Esther Company has provided the following financial information for last year:

	Division A	Division B
Sales	$500,000	$550,000
Variable costs	200,000	350,000
Traceable fixed costs	75,000	90,000
Allocated common costs	50,000	160,000
Net operating income (loss)	$175,000	$(50,000)

Esther Company's management plans on closing Division B by the end of the year. Traceable fixed costs are avoidable but allocated common costs are not.

Should Esther Company close Division B and what is the financial effect of closing Division B on overall company net operating income?

You must show all calculations used in determining your answer