Granfield Company is considering eliminating its backpack division, which reported a loss for the recent year of $$51,000$ as shown below.

$$

Segment Income $($Loss$)$

Sales $ $996,000$

Variable costs $493,000$

Contribution margin $503,000$

Fixed costs $554,000$

Income $($loss$)$ $ $(51,000)$

If the backpack division is dropped, all $$493,000$ of its variable costs are avoidable, and $$221,600$ of its fixed costs are avoidable. The impact on Granfield$$s income from eliminating this business segment would be:

Multiple Choice

$$503,000$ decrease

$$221,600$ increase

$$281,400$ decrease

$$503,000$ increase

$$281,400$ increase