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. Anderson$$s information about the two divisions is as follows:

Book Division Magazine Division Total

Sales Revenue $ $7,940,000$ $ $3,359,200$ $ $11,299,200$

Cost of Goods sold

Variable manufacturing costs $2,140,0001,066,8003,206,800$

Fixed manufacturing costs $1,091,5001,236,1002,327,600$

Gross Profit $ $4,708,500$ $ $1,056,300$ $ $5,764,800$

Operating Expenses

Variable operating expenses $149,000218,500367,500$

Fixed operating expenses $2,930,0001,196,8004,126,800$

Net income $ $1,629,500$ $ $(359,000)$ $ $1,270,500$

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:

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

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