Question
Anderson Publishing has two divisions: Book Publishing & Magazine Publishing. The Magazine division has been losing money for the last 5 years and Anderson
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: Magazine Division $ 3,443,800 Total $11,583,800 Sales Revenue Cost of Goods sold Variable costs Fixed costs. Book Division. $ 8,140,000 2,340,000 1,111,500 $ 4,688,500 Gross Profit Operating Expenses Variable Fixed Net income $ 1,569,500 169,000 2,950,000 1,166,500 1,287,600 $ 989,700 247,900 1,208,000 (466,200) 3,506,500 2,399,100 $ 5,678,200 416,900 4,158,000 $ 1,103,300 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? Answer is not complete. Complete this question by entering your answers in the tabs below. Required 1 Required 2
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