Division B Earns a Contribution Margin of $200,000 and Has

Multiple Choice

Division B earns a contribution margin of $200,000 and has a divisional margin of $70,000. If Division B is closed, all of the direct divisional expenses and $110,000 of common expenses can be eliminated. These facts indicate that closing the division will cause the firm's operating income to

A) increase by $90,000.
B) decrease by $90,000.
C) increase by $40,000.
D) decrease by $40,000.