Carns Company is considering eliminating its Small Tools Division, which reported a loss for the prior year of $165,000 as shown below. Segment Income (Loss) Sales. Variable costs Contribution margin Fixed costs Income (loss) $ 1,390,000 1,255,000 135,000 300,000 $ (165,000) If the Small Tools Division is dropped, all of its variable costs are avoidable, and $105,000 of its fixed costs are avoidable. The impact on Carns's income from eliminating the Small Tools Division would be:

Carns Company is considering eliminating its Small Toois. Division, which reported a loss for the prior year of $165,000 as shown below: If the Small Tools Division is dropped, all of its variable costs are avoidable, and $105,000 of its fixed costs are avoidable. The Impact on Carns's income from eliminating the Small Tools Division would be: Multiple Choice $63,000 decrease $30,000 decrease $300,000 decrease $30,000 increase $105,000 decrease