Chamberline Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated.

CHAMBERLINE COMPANY Income Statements for the Year 2012

Segment	A	B	C
SALES	$194,000	$260,000	$353,000
COST OF GOODS SOLD	(146,000)	(104,000)	(187,000)
SALES COMMISSIONS	(22,000)	(40,000)	(21,000)
CONTRIBUTION MARGIN	26,000	116,000	145,000
GENERAL FIXED OPER. EXP.(ALLOCATION OF PRESIDENTS SALARY)	(45,000)	(53,000)	(40,000)
ADVERTISING EXPENSE (SPECIFIC TO INDIVIDUAL DEVISIONS)	(5,000)	(9,000)	0
NET INCOME	$(24,000)	$54,000	$105,000

Required:

(a)

What is the profitability of segment A?

Relevant Rev. and Cost items for Segment A

REVENUE	?
COST OF GOODS SOLD	?
SALES COMMISSIONS	?
ADVERTISING EXPENSE	?
EFFECT ON INCOME	?

(b)

Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A.

Decision	Keep Segment A	Eliminate Segment A
REVENUE	$	$
COST OF GOODS SOLD	?	?
SALES COMMISSION	?	?
CONTRIBUTION MARGIN	?	?
GEN. FIXED OPERATING EXPENSE	?	?
ADVERTISING EXPENSE
NET INCOME	$	$