Valber Company is considering eliminating its phone division. The company allocates fixed costs based on sales. If the phone division is dropped, $151,000 of the fixed costs allocated to that division could be eliminated. The impact on Valber's operating income from eliminating the phone division would be: Sales Variable costs Contribution margin Pixed costs Net income (loss) Desktops $ 359,000 202,000 157,000 72,200 84,800 Laptops $874,500 636,000 238,500 175,300 63,200 Tablets $697,000 529,000 168,000 139,800 28,200 Phones $976,000 796,000 180,000 196,000 (16,000) Multiple Choice $6,000 decrease $151,000 increase $151,000 decrease $16,000 increase $29,000 decrease CIL 14-23 1 Signal mistakenly produced 1,100 defective cell phones. The phones cost $63 each to produce. A salvage company will buy the defective phones as they are for $37 each. It would cost Signal $86 per phone to rework the phones. If the phones are reworked, Signal could sell them for $150 each. Signal has excess capacity. Should Signal scrap or rework the phones? Scrap Rework