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TB MC Qu$.23-109$ Carns Company is considering...

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Carns Company is considering eliminating its small tools division, which reported an operating loss for the recent year of $$92,000.$ Division sales for the year were $$1,380,000$ and its variable costs were $$1,245,000.$ The fixed costs of the division were $$290,000.$ If the kitchen division is dropped, $40\%$ of the fixed costs allocated it could be eliminated. The impact on Carns's operating income from eliminating the small tools division would be:

Multiple Choice

$$40,900$ decrease

$$116,000$ increase

$$19,000$ increase

$$19,000$ decrease

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