5 6 Jim Coston was reviewing the latest income statement for Trenton Communications. For the second year in a row, the Audio division was showing a negative segment margin, and Jim thought it was time to close the division to increase the company's operating income. The income statement that he examined follows. Sales revenue Less variable expenses Contribution margin Less traceable fixed expenses Segment margin Common fixed costs Net operating income Video Division $5,318,800 3,658,700 1,660,100 944,000 $716,100 Audio Division Total $2,860,600 $8,179,400 1,647,400 5,306,100 1,213,200 2,873,300 1,280,200 2,224,200 $(67,000) 649,100 585,000 $64,100 When Jim broke the news, Chloe Sams, manager of the Audio division, was upset. Chloe thought that Jim could be making a snap judgment, and suggested that he look at the division's detailed operating results. The Audio division is composed of two groups, Streaming and CD. Streaming accounts for 75% of the division's sales and contribution margin; CD accounts for the other 25%. Streaming's traceable fixed costs are $450,500: CD. $350,500. 35 36 com 37 net Prepare a segment margin income statement for the Audio division that shows the segment margin of each group. (If the amount is negative then enter with a negative sign preceding the number, eg. -5,125 or parenthesis, eg. (5,125) and round answers to O decimal places, e.g. 5,125.) Streaming CD Total Audio Division Should Jim Coston close the Audio Division? Jim should consider closing