Carns Company is considering eliminating its Small Tools Division, which reported a loss for the prior year of $205,000 as shown below. Segment Income (Loss) Sales $ 1,430,000 Variable costs 1,295,000 Contribution margin 135,000 Fixed costs 340,000 Income (loss) $ (205,000) If the Small Tools Division is dropped, all of its variable costs are avoidable, and $119,000 of its fixed costs are avoidable. The impact on Carns’s income from eliminating the Small Tools Division would be: Multiple Choice
