Jackson Brothers Instruments sells stringed instruments. Trent Jackson, the company's president, just received the following income statement reporting the results of the past year. Sales revenue Variable cost of goods sold Fixed cost of goods sold Gross profit Variable operating expenses Fixed operating expenses Common fixed costs Operating income Banjos $1,250,000 850,000 115,000 285,000 170,000 85,000 40,000 $(10,000) Guitars Fiddles Total $3,600,000 $2,380,000 $7,230,000 2,340,000 1,904,000 5,094,000 188,000 166,000 469,000 1,072,000 310,000 1,667,000 675,000 238,000 1,083,000 80,000 83,000 248,000 110,000 77,000 227,000 $ 207.000 ($88,000) $ 109,000 Trent is concerned that two of the company's divisions are showing a loss, and he wonders if the company should stop selling Banjos and Fiddles to concentrate solely on guitars. Required a. Prepare a segment margin income statement. Fixed cost of goods sold and fixed operating expenses can be traced to each division. b. Should Trent close the banjos and fiddles divisions? Why or why not? C. Trent wants to change the allocation method used to allocate common fixed costs to the divisions. His plan is to allocate these costs based on sales revenue. Will this new allocation method change your decision on whether to close the guitars and fiddles divisions? Why or why not