Book Division				Magazine Division				Total
Sales Revenue	$	7,820,000			$	3,320,000			$	11,140,000
Cost of Goods sold
Variable costs		2,005,000				1,003,000				3,008,000
Fixed costs		77,700				202,000				279,700
Gross Profit	$	5,737,300			$	2,115,000			$	7,852,300
Operating Expenses
Variable		137,000				200,000				337,000
Fixed		3,918,000				2,191,000				6,109,000
Net income	$	1,682,300			$	(276,000	)		$	1,406,300

The variable operating expenses are directly attributable to the division. Of the total fixed costs (manufacturing and operating), $4,002,000 are shared between the divisions, allocated $2,813,000 to the Book Division and the remaining to the Magazine Division. The remainder of the fixed costs are directly attributable to each division.

Required:

1. Present the financial information in the form of a segmented income statement (using the contribution margin approach).

2. What will be the impact on net income if the Magazine Division is eliminated?