Anderson Publishing has two divisions Book Publishing & Magazine Publishing The Magazine division has been losing...

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Anderson Publishing has two divisions Book Publishing & Magazine Publishing The Magazine division has been losing money for the last 5 years and Anderson is considering eliminating that division Anderson's information about the two divisions is as follows Sales Revenue Cost of Goods sold Fixed costs Book Division $7,540,000 Magazine Division $ 3,359,200 Total $ 11,299,200 3,206,000 2,327,600 $5,764,000 Variable costs 2,140,000 1,091,500 Gross Profit $4,703,500 1,066,880 1,236,100 $1,056,300 Operating Expenses Variable Fixed Net Income 149,000 2,930,000 $1,629,500 218,500 1,196,800 (359,000) 367,500 4,126,800 $1,278,500 Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attribute to each division The remainder 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? Anderson Publishing has two divisions Book Publishing & Magazine Publishing The Magazine division has been losing money for the last 5 years and Anderson is considering eliminating that division Anderson's information about the two divisions is as follows Sales Revenue Cost of Goods sold Fixed costs Book Division $7,540,000 Magazine Division $ 3,359,200 Total $ 11,299,200 3,206,000 2,327,600 $5,764,000 Variable costs 2,140,000 1,091,500 Gross Profit $4,703,500 1,066,880 1,236,100 $1,056,300 Operating Expenses Variable Fixed Net Income 149,000 2,930,000 $1,629,500 218,500 1,196,800 (359,000) 367,500 4,126,800 $1,278,500 Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attribute to each division The remainder 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?