are the company's operating 8.29 (LO 5) Excel Eliminating operations Capital Toys' management is considering eliminating product A, which has been showing a loss for several years. The company's annual income statement, in $000s, is as follows: B Total Sales revenue $2,200 $1,400 $1,800 $5,400 Variable expenses 1,650 600 1,080 3,330 Contribution margin $ 550 $ 800 $ 720 $2,070 Advertising' expense $ 500 $ 475 $ 520 $1,495 Depreciation expense 15 10 20 45 Corporate expenses 90 80 105 275 Total fixed expenses $ 605 $ 565 $ 645 $1,815 Operating income $ (55) $ 235 $ 75 $ 255 Specific to each product. Specific to each product; no other use available, no resale value. Allocated based on number of employees. Required a. Restate the income statement in segment margin format. b. What would be the effect on income if product A were dropped? nting Information to Make Managerial Decisions c. Management is considering making a new product using product A's equipment. If the new prod- uct's selling price per unit were $12, its variable costs were $8, and its advertising costs were the same as for product A, how many units of the new product would the company have to sell to make the switch from product A to the new product worthwhile