South-Central Publishing Company prepares income statements segmented by divisions, but the chief operating officer is not certain about how the company is actually performing. Financial data for the year follow:

The Electronic Publishing Division appears to be floundering, and the CEO believes a closer look should be taken concerning its operating effectiveness. Additional data regarding this division follow:

The Electronic Division's accounting books are downloadable texts sold to auditors and controllers. The current data on these two markets follow:

Required:
1. Prepare an income statement segmented by products of the Electronic Division, for the year ended 2011, including a column for the division as a whole.
2. Prepare an income statement, segmented by markets, for the accounting books of the Electronic Division.
3. Evaluate the accounting books of the Electronic Division. Should all books be kept, or should some books bediscontinued?

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Digital Software, Inc. Product Line and Company Income S For the Year Ended December 31, 2011 Num 1 $400,000 160,000 S240,000 Num 2 S600,000 $1,000000 240,000 S360,000 S 140,000 $220,000 300,000 Tota Sales Less variable expenses Contribution margin Less direct fixed expenses160,000 Product margin Less common fixed expenses Net income. 400,000 300,000 S 80,000 120,000 S 180,000 Num 1 ._.... Num 2 Total sales North $240,000 180,000 $420,000 South $160,000 420,000 $580,000 Sales Market Auditors Controllers Sales $80,000 $220,000 Variable manufacturing expenses as a percentage of sales Other variable expenses as a percentage of sales Directfixed expenses 60% 60% 5% 5% 30000 50,000