Summers Corporation Is Composed of Five Divisions If the Metro Division Is Closed, 100% of the Traceable

Multiple Choice

Summers Corporation is composed of five divisions. Each division is allocated a share of Summers's overhead to make divisional managers aware of the cost of running the corporate headquarters. The following information relates to the Metro Division: $\begin{array}{lr}\text { Sales } & \$ 7,500,000 \\\text { Variable operating costs } & 5,100,000 \\\text { Traceable fixed operating costs } & 1,900,000 \\\text { Allocated corporate overhead } & 300,000\end{array}$ If the Metro Division is closed, 100% of the traceable fixed operating costs can be eliminated. What will be the impact on Summers's overall profitability if the Metro Division is closed?

A) Decrease by $200,000.
B) Decrease by $500,000.
C) Decrease by $2,100,000.
D) Decrease by $2,400,000.
E) None of the answers are correct.