Derrald Pearl Company has two divisions, Computer Consulting and Construction. During the most recent year, the two divisions had the following operating data:

Required:
1. Prepare a segment margin statement for Derrald Pearl Company. Include three columns' one for the company total and one for each of the two divisions.
2. Based on the segment margin statement prepared in part (1), what would happen to overall company profits if the Construction Division were to be discontinued?
3. Should either of the divisions be discontinued?Explain.

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Computer Consulting Construction Revenue $600,000 $250,000 15% $30,000 S100,000 Contribution-margin percentage Fixed costs controllable by division managers Fixed costs allocated by corporate headquarters 45% $200,000 S100,000