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i ne president ot Ravens Inc. attended a seminar about the contribution margin model and returned to ner company tot or enthusiasm about it. She

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i ne president ot Ravens Inc. attended a seminar about the contribution margin model and returned to ner company tot or enthusiasm about it. She requested that last year's traditional model income statement be revised, and she received the following report Division Sales Variable expenses Contribution martin Find expenses ut incon (loss) Total Company $424,000 243,000 $131,000 133.000 $168,000 101.000 $ 57,000 44,000 $ 23,000 $100,000 62,000 546,000 49.000 $(1,000) $148,000 80,000 $ 58,00 40.000 $ 28,000 The president was told that the fixed expenses of $133,000 included $93.000 that had been split evenly between divisions because they were general corporate expenses. After looking at the statement, the president exclaimed, "I knew it! Division B is a dragon the whole company, Close it down!" Required: a. Evaluate the president's remark The president's remark ignores the misleading result of arbitrarily allocated fixed expenses, The president's remark ignotes the misleading result of arbitrarily allocated variable expenses. b. Calculate what the company's net income would be if Division B were closed down $ 38.000

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