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Calgary Corporation is closing one of its divisions. Operating data on this division follows:
Sales: $80,000
Variable costs: 40,000
Overhead: 40,000
Question 1: Assuming all overhead costs continue to be incurred even if the division closes, what will be the effect on overall company profits of closing the division?
Group of answer choices
Option 1: $10,000 decrease
Option 2: $30,000 decrease
Option 3: $40,000 decrease
Option 4: $40,000 increase
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