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 DivisionMagazine DivisionTotalSales Revenue$ 7,920,000$ 3,350,800$ 11,270,800Cost of Goods sold Variable manufacturing costs2,120,0001,056,8003,176,800Fixed manufacturing costs1,089,5001,230,9002,320,400Gross Profit$ 4,710,500$ 1,063,100$ 5,773,600Operating Expenses Variable operating expenses147,000215,600362,600Fixed operating expenses2,928,0001,195,7004,123,700Net income$ 1,635,500$ (348,200)$ 1,287,300

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.

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?

Book DivisionMagazine DivisionTotal Variable costs Direct fixed costs Common fixed costs Net income (loss)