Question: Granfield Company is considering eliminating its backpack division which reported a loss for the recent year of $42,500 as shown below. Segment Income Loss Sales

Granfield Company is considering eliminating its backpack division which reported a loss for the recent year of $42,500 as shown below.

Segment Income Loss

Sales - $962,000

Variable Cost- $476,000

Contribution Margin - $486,000

Fixed costs - $528,500

Income (Loss) - $(42,500)

If the backpack division is dropped, all $476,000 of it's variable costs are avoidable, and $211,400 of its fixed costs are avoidable. The impact on Granfields income by eliminating this business segment would be

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