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Granfield Company is considering eliminating its backpack division which reported a loss for the recent...

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Accounting

Granfield Company is considering eliminating its backpack division which reported a loss for the recent year of $42,000 as shown below.

Segment Income Loss

Sales - $960,000

Variable Cost- $475,000

Contribution Margin - $485,000

Fixed costs - $527,000

Income (Loss) - $(42,000)

If the backpack division is dropped, all $475,000 of it's variable costs are avoidable, and $210,800 of its fixed costs are avoidable. The impact on Granfields income by eliminating this business segment would be

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