Crane , 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 division's manager , insisted Matthew, that his division earned money for the company . Following is the most recent financial analysis for each division : WeakAverage Strong Sales revenue $ 125,000 $456,500 $505,300 Variable expenses 51,700 247,300 303,600 Contribution margin 73,300 209,200 201,700 Direct expenses 30,30078,700 117,700 Allocated expenses 71,600 71,600 71,600 Operating income $( 28,600 ) $ 58,900 $12,400

b) By how much would total income change if the Weak division were dropped?

Total income will [increase/decrease] by $___

c) 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 Average will report allocated expenses of $_____ resulting in an [operating income/operating loss] of $____ for the division.