Bryson Company's Western Territory's Forecasted Income Statement for the Upcoming

Bryson Company's western territory's forecasted income statement for the upcoming year is as follows:
$$\begin{array} { | l | r | } \hline \text { Sales revenue } & \$ 700,000 \\\hline \text { Variable costs } & \underline { 600,000 } \\\hline \text { Contribution margin } & \$ 100,000 \\\hline \text { Fixed costs } & \underline { 596,000 } \\\hline \text { Operating income (loss) } & \$ ( 496,000 \\\hline\end{array}$$ Bryson Company's management is considering dropping the western territory. If the company eliminates $496,000 of fixed costs by dropping the segment, the segment should be dropped.