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	$ 8,000,000	$ 3,384,600	$ 11,384,600
Cost of Goods sold
Variable manufacturing costs	2,200,000	1,096,700	3,296,700
Fixed manufacturing costs	1,097,500	1,251,500	2,349,000
Gross Profit	$ 4,702,500	$ 1,036,400	$ 5,738,900
Operating Expenses
Variable operating expenses	155,000	227,300	382,300
Fixed operating expenses	2,936,000	1,200,200	4,136,200
Net income	$ 1,611,500	$ (391,100)	$ 1,220,400

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?

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