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Pegasus Division earns a confribution margin of $200,000 and has a division margin of ...

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Accounting

Pegasus Division earns a confribution margin of $200,000 and has a division margin of
$75,000. If Pegasus Division is closed, the firm can eliminate all of the direct division
expenses and $110,000 of common expenses. How will closing the division affect the
firm's operating income?
Lower operating income by $35,000
Lower operating income by $75,000
Increase operating income by $35,000
Increase operating income by $75,000
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