Current Attempt in Progress Wildhorse Toys' management is considering eliminating product A, which has been showing a loss for several years. The company's annual income statement, is as follows: A B C Total Sales $2,292,000 $1,400,000 $1,818,500 $5,510,500 Variable expenses 1,658,000 600,200 1,091,900 3,350,100 Contribution margin $634,000 $799,800 $726,600 $2,160,400 Advertising expense $530,000 $429,000 $520,000 $1,479,000 Depreciation expense 17,100 10,600 21,900 49,600 Corporate expenses 99,600 80,700 105,600 285,900 Total fixed expenses $646,700 $520,300 $647,500 $1,814,500 Operating income $(12,700) $279,500 $79,100 $345,900 Advertising expense - Specific to each product. Depreciation expense - Specific to each product; no other use available, no resale value. Corporate expenses - Allocated based on number of employees.(a) Restate the income statement in segment margin format. A B tA $ Advertising Common fixed expenses Contribution margin Depreciation Direct fixed expenses Operating profit Sales Revenue V Segment margin Variable expenses V V $ V V eTextbook and Median format. C Total $ $(b) What would be the effect on income if product A were dropped? Net income would |by $ e Textbook and Media Save for Later Attempts: 0 of 3 used Submit Answer (c) Management is considering making a new product using product A's equipment. If the new product's selling price per unit were $11, its variable costs were $6, and its advertising costs were the same as for product A, how many units of the new product would the company have to sell to make the switch from product A to the new product worthwhile? Units eTextbook and Media Save for Later Attempts: 0 of 3 used Submit