B) Calculate what the company's net income would be if Division B were closed down.

The president of Ravens Inc. attended a seminar about the contribution margin model and returned to her company full of enthusiasm about it. She requested that last year's traditional model income statement be revised, and she received the following report: Division Sales Variable expenses Contribution margin Fixed expenses Net income (loss) Total Company $502,000 274,000 $ 228,000 181,000 $ 47,000 $ 194,000 113,000 $ 81,000 57,000 $ 24,000 B $ 134,000 68,000 $ 66,000 71,000 $ (5,000) $174,000 93,000 $ 81,000 53,000 $ 28,000 The president was told that the fixed expenses of $181,000 included $99,000 that had been split evenly between divisions because they were general corporate expenses. After looking at the statement, the president exclaimed, "I knew it! Division B is a drag on the whole company. Close it down