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We the followintomation to actions 28.29. Narthan three divisions (Chod, Tolbot, and Heather with the following information: Chad Talbot Heather Total Sales Revenue $60,000 $50,000 $40,000 $150,000 Varcast $35.000 $28.000 $30.000 $93.000 $25,000 $22.000 $10,000 $57.000 Less Direct Fixed Cost $5.500 $4,500 $6.500 $16.500 Segment Margin $19.500 $17.500 $3,500 $40,500 Less Common Fixed Costs $11.000 $10.500 $6.000 $22.500 Net Operating Income (Loss) $8.500 $2.000 ($2.500) $13.000 Market is considering eliminating its Heather division. How much will Market's net operating income increase or decrease if Heather is eliminated $4.000 decrease $3.500 decrease $2.500 increase $2.500 decrease Matheson (Chad Talbot, and Heather with the following formation Chad Talbot Heather Total Sales Reserve $60.000 $50.000 $40.000 $150,000 Var cost $325.000 $28.000 $30.000 $23.000 $25,000 $22,000 $10,000 $57,000 Loss Direct Fixed Cost $5.500 $4.500 $6,500 $16.500 Segment Margin $19.500 $17.500 $3,500 $40.500 Less Common Fixed Costs $11.000 $10.500 $6.000 $27.500 Net Operating Income (Loss) $8.500 $2.000 (52500) $13.000 Now suppose that $4,000 of the common fixed costs could be avoided if the Heather division was eliminated. Now how much will Market's net operating income increase or decrease if Heather is eliminated? 1 51.500 decrease $1.500 increase $500 Increase $500 decrease

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