M$17-17.$ Discontinuing a Segment

Anthropologie, owned by URBN, sells both standard and custom size furniture items. Assume that the

contribution income statements for both segments follow.

Management is considering discontinuing the Custom segment due to the segment's net loss of $$15,000.$

Of the total fixed costs for the Custom segment, $$10,000$ would not be incurred $($a cost saving$)$ if the

Custom segment is dropped. Management expects no changes to the sales of the Standard segment if

the Custom segment is discontinued.

Required

If the Custom segment is discontinued, what will be the net effect on the profit of the company?