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. Andersons information about the two divisions is as follows:

	Book Division				Magazine Division				Total
Sales Revenue	$	7,940,000			$	3,440,000			$	11,380,000
Cost of Goods sold
Variable costs		2,036,000				1,039,000				3,075,000
Fixed costs		78,900				214,000				292,900
Gross Profit	$	5,825,100			$	2,187,000			$	8,012,100
Operating Expenses
Variable		149,000				212,000				361,000
Fixed		3,930,000				2,203,000				6,133,000
Net income	$	1,746,100			$	(228,000	)		$	1,518,100

The variable operating expenses are directly attributable to the division. Of the total fixed costs (manufacturing and operating), $4,014,000 are shared between the divisions, allocated $2,825,000 to the Book Division and the remaining to the Magazine Division. The remainder of the fixed costs are directly attributable to each division.

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?

Required 2 Required 1 Present the financial information in the form of a segmented income statement (using the contribut Magazine Division Book Division Total $ $ Sales revenue 7,940,000 3,440,000 Variable costs Cost of goods sold 2,036,000 1,039,000 Direct fixed costs Net income (loss) 2. What will be the impact on net income if the Magazine Division is eliminated? Complete this question by entering your answers in the tabs below. Required 1 Required 2 What will be the impact on net income if the Magazine Division is eliminated? Impact on net income Required 1 Required 2