E7-12 (Algo) Analyzing Keep-or-Drop Decision [LO 7-2, 7-5) Anderson Publishing has two divisions: Book Publishing & Magazine Publishing. The Magazine division has been losing money for the last 5 years and Anderson is considering eliminating that division Anderson's information about the two divisions is as follows: Book Division S8, 120,000 Magazine Division $ 3,435,400 Total $11,555,400 Sales Revenue Cost of Goods sold Variable costs Fixed costs Gross Profit Operating Expenses Variable Fixed Net Income 2,320,000 1,109,500 $4,690,500 1,156,500 1,282,400 $ 996,500 3,476,500 2,391,900 $ 5,687,000 167,000 2,948,000 $ 1,575,500 244,900 1,206.900 s (455,300) 411,900 4, 154,900 $ 1,120,200 Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attribute to each division. The remainder are common or shared between the two divisions. 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? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 1 Required 2 Present the financial information in the form of a segmented income statement (using the contribution margin ap Magazine Division Total Book Division Sok ences Variable costs Direct fixed costs Common fixed costs Net income (loss) Populad Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attribute to each division. The remainder are common or shared between the two divisions, 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 of the Magazine Division is eliminated? Complete this question by entering your answers in the tabs below. 5 Required 1 Required 2 What will be the impact on net income if the Magazine Division is eliminated? Impact on net income Required 1 Required 2