ABC Company provides the following information for their three divisions (A, B, & C)

	A	B	C	Total
Sales	$ 500,000	$300,000	$900,000	$1,700,000	100%
Variable exp.	350,000	210,000	630,000	1,190,000	70%
Contribution margin	$ 150,000	$ 90,000	$270,000	$ 510,000	30%
Fixed exp.	100,000	75,000	75,000	250,000
Common costs *	29,500	17,500	53,000	100,000
Operating income	20,500	(2,500)	142,000	$ 160,000

ABC asked you to look into their Divisional performance. They provide the following information:

There are two products sold by each division – Tonkas and Wonkas. They each represent 50% of the total sales for their division. However, variable costs for Tonkas are 75% of sales and Wonkas are 65% of sales for each product line. Traceable fixed expenses for Tonkas and Wonkas are provided for each division. Common costs for each division are allocated based on divisional revenues rounded to the nearest $ 00’s.

Required:

Prepare a segment margin format income statement for each Division, and the total for all divisions. Comment on the performance of each Division.

Should the company drop any Division? Give quantitative reasons why/why not?