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Blossom, Inc. operates three divisions, Weak, Average, and Strong. As it turns out, the Weak division has the lowest operating income, and the president wants

Blossom, Inc. operates three divisions, Weak, Average, and Strong. As it turns out, the Weak division has the lowest operating income, and the president wants to close it. Survival of the fittest, I say! was his response when the Weak divisions manager insisted that his division earned money for the company. Following is the most recent financial analysis for each division:

Weak Average Strong
Sales revenue $127,800 $340,300 $543,900
Variable expenses 57,300 190,200 307,400
Contribution margin 70,500 150,100 236,500
Direct expenses 35,400 70,900 113,700
Allocated expenses 58,000

58,000 58,000
Operating income $(22,900 ) $21,200 $64,800

Based on the way allocated expenses are divided among the divisions, what do you think will happen to the Average division if the company continues to prepare financial statements in this way, assuming Weak was dropped?

If Weak is dropped, then $

will be allocated to Average, resulting in a $

lossprofit

for the division as currently reported

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