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 $ $8,120,000$ $ $3,435,400$ $ $11,555,400$

Cost of Goods sold

Variable manufacturing costs $2,320,0001,156,5003,476,500$

Fixed manufacturing costs $1,109,5001,282,4002,391,900$

Gross Profit $ $4,690,500$ $ $996,500$ $ $5,687,000$

Operating Expenses

Variable operating expenses $167,000244,900411,900$

Fixed operating expenses $2,948,0001,206,9004,154,900$

Net income $ $1,575,500$ $ $(455,300)$ $ $1,120,200$

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:

Compute the contribution margin and the segment margin of each division and the company as a whole.

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