Beta Company has two divisions Wizards and Wands, Beta is considering discontinuing Wands, due to the division's continuing operating losses. Beta's current incame statement is presented below it Wands is discontinued all employees of the division will be laid off. Factory rent and general expenses are allocated based on sales dollars and are not directly related to individual product lines Total Wizards Wands Sales 31,000,000 $800,000 $200,000 Variable manufacturing and selling expenses 500.000 350.000 150.000 Contribution Margin 1.500.000 450.000 Pred Expenses Factory rent $ 50.000 $40.000 $10,000 Product line managers' salaries General expenses 90.000 67.500 22.500 Total fixed expenses 5167.500 5.72.500 Net operating income (los) $260.000 5282.500 ($22.500) 100.000 60,000 40,000 5. 240.000 The financial advantage (disadvantage of discontinuing Wands is: ($17.500) $ 40,000 (510.000) $ 22.500