The multipe choice questions for 1 and 2 are: increase/decrease and more than covers/covers

If you could please show step by step on how for requirement 1 the correcr answer was operating income would decrease by 16,800 would be greatly appreciated. and if you could solve #2 and #3 as well thanks.

Oullette Corporation has four operating divisions. The budgeted revenues and expenses for each division for 2014 follows: EE (Click to view the results of each division.) Closing down any division would result in savings of 60% o he fixed costs o hat division. Top management is very concerned about the unprofitable divisions A and B and is considering closing them or the year. Requirements 1. Calculate the increase or decrease in operating income if Oullette closes Division A. 2. Calculate the increase or decrease in operating income if Oullette closes Division B 3. What other factors should the top management of Oullette consider before making a decision? Requirement 1. Calculate the increase or decrease in operating income if Oullette closes Division A. The contribution margin for Division A is S 57000. The fixed costs that will be saved by closing Division A are $ 40200. Thus, operating income would decrease by $ 16,800 if Oullette closes Division A. Division A's contribution margin more than covers its avoidable fixed costs. Requirement 2. Calculate the increase or decrea 1Data Table ses Division B. Division B's contribution margin The contribution margin for Division B is S. The its avoidable fixed costs Division Sales Cost of goods sold Selling, general, and administrative expenses Operating income/loss Further analysis of costs reveals the following percentages of variable costs in each division Cost of goods sold Selling, general, and administrative expenses $ 490,000 $ 480,000 $ 950,000 $ 780,000 375,000 560,000 500,000 200,000 $ (10,000) $(5,000) $ 145,000 $ 80,000 400,000 100,000 110,000 245,000 93 % 89 % 86 % 85 % Enter your answer in the edit fields and then cli 61% 81 % 70% 65 %