Anthony Walker was reviewing the latest income statement for Sandhill Communications. For the second year in a row, the Audio division was showing a negative segment margin, and Anthony thought it was time to close the division to increase the companys operating income. The income statement that he examined follows. Video Division Audio Division Total Sales revenue $5,306,400 $2,861,100 $8,167,500 Less variable expenses 3,661,300 1,645,500 5,306,800 Contribution margin 1,645,100 1,215,600 2,860,700 Less traceable fixed expenses 950,600 1,276,200 2,226,800 Segment margin $694,500 $(60,600) 633,900 Common fixed costs 555,000 Net operating income $78,900 When Anthony broke the news, Michelle Hall, manager of the Audio division, was upset. Michelle thought that Anthony could be making a decision too quickly, and suggested that he look at the divisions detailed operating results. The Audio division is composed of two groups, Streaming and CD. Streaming accounts for 75% of the divisions sales and contribution margin; CD accounts for the other 25%. Streamings traceable fixed costs are $452,100; CD, $352,100.

a. Prepare a segment margin income statement for the Audio division that shows the segment margin of each group.