Gion Company is considering eliminating its windows division, which reported an operating loss for the recent year of $105,000. Division sales for the year were $1,110,000 and its variable costs were $975,000. The fixed costs of the division were $220,000. If the windows division is dropped, 65% of the fixed costs allocated to it could be eliminated. The impact on Gion's operating income from eliminating this business segment would be:
A. $143,000 decrease
B. $7,200 decrease
C. $143,000 increase
D. $8,000 increase
E. $8,000 decrease
Answer: D
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