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Spring 20 Company is deciding whether or not to drop the consumer division. Currently the...

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Accounting

Spring 20 Company is deciding whether or not to drop the consumer division. Currently the division has sales of $250,000 and variable costs of $110,000. The company accountants estimate that dropping the consumer division will decrease total fixed costs by $85,000.

What is the expected increase or decrease in operating income of the division is dropped? Show and label your work, including whether it is an increase or decrease.

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