Division B earns a contribution margin of $200,000 and has a divisional margin of $70,000. If Division B is closed, all of the direct divisional expenses and $110,000 of common expenses can be eliminated. These facts indicate that closing the division will cause the firm's operating income to
A)increase by $90,000.
B)decrease by $90,000.
C)increase by $40,000.
D)decrease by $40,000.

Question

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The Answer of Division B earns a contribution margin of $200,000 and has a divisional margin of $70,000. If Division B is closed, all of the direct divisional expenses and $110,000 of common expenses can be eliminated. These facts indicate that closing the division will cause the firm's operating income to
A)increase by $90,000.
B)decrease by $90,000.
C)increase by $40,000.
D)decrease by $40,000.

Division B Earns a Contribution Margin of $200,000 and Has