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 $ $8,140,000$ $ $3,443,800$ $ $11,583,800$

Cost of Goods sold

Variable manufacturing costs $2,340,0001,166,5003,506,500$

Fixed manufacturing costs $1,111,5001,287,6002,399,100$

Gross Profit $ $4,688,500$ $ $989,700$ $ $5,678,200$

Operating Expenses

Variable operating expenses $169,000247,900416,900$

Fixed operating expenses $2,950,0001,208,0004,158,000$

Net income $ $1,569,500$ $ $(466,200)$ $ $1,103,300$

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.

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?