Anderson Publishing has two divisions: Book Publishing and Magazine Publishing. The Magazine division has been losing money for the last five years and Anderson is considering eliminating that division. Andersons information about the two divisions is as follows:

	Book Division	Magazine Division	Total
Sales Revenue	$ 8,160,000	$ 3,452,300	$ 11,612,300
Cost of Goods sold
Variable manufacturing costs	2,360,000	1,176,500	3,536,500
Fixed manufacturing costs	1,113,500	1,292,700	2,406,200
Gross Profit	$ 4,686,500	$ 983,100	$ 5,669,600
Operating Expenses
Variable operating expenses	171,000	250,800	421,800
Fixed operating expenses	2,952,000	1,209,100	4,161,100
Net income	$ 1,563,500	$ (476,800)	$ 1,086,700

Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attributable to each division. The remaining are common or shared between the two divisions.

Required:

1. Present the financial information in the form of a segmented income statement (using the contribution margin approach).

2. What will be the impact on net income if the Magazine Division is eliminated?