Question 3 (2 points)

Based on the following data:

Data for Question 3

Sales

Variable Costs

Contribution Margin

Fixed Costs

Operating Income

Division A

$700,000

530,000

170,000

65,000

$105,000

Division B

$100,000

85,000

15,000

25,000

($10,000)

Total

$800,000

615,000

185,000

95,000

$90000

1. If Division A is dropped, what will total operating income be
2. If Division B is dropped what will total EBIT be