Vanik Corporation currently has two divisions which had the following operating results for last year: Cork DivisionRubber Division Sales$ 600,000$ 350,000 Variable costs250,000220,000 Contribution margin350,000130,000 Traceable fixed costs160,000110,000 Segment margin190,00020,000 Allocated common corporate fixed costs80,00045,000 Net operating income (loss)$ 110,000$ (25,000) Because the Rubber Division sustained a loss, the president of Vanik is considering the elimination of this division. All of the division’s traceable fixed costs could be avoided if the division was dropped. None of the allocated common corporate fixed costs could be avoided. If the Rubber Division was dropped at the beginning of last year, the financial advantage (disadvantage) to the company for the year would have been:
