HomeGoods Corporation operates two divisions, the Commercial Division and the Consumer Division. The Commercial Division manufactures and sells products to wholesalers. The Consumer Division operates retail outlet which sell products directly to individuals. The company is considering disposing of the Commercial Division since it has been consistently unprofitable for a number of years. The income statements for the two divisions for the year ended December 31 are presented below: 
If the Commercial Division is to be dropped, half of the fixed costs can be eliminated since they are direct fixed costs of the Commercial Division. Should HomeGoods drop the Commercial Division? Show computations.
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