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Jim Costori was reviewing the latest income statement for Trenton Communicationis. For the second year in a row, the rudio divisioni was showing a negative
Jim Costori was reviewing the latest income statement for Trenton Communicationis. For the second year in a row, the rudio divisioni was showing a negative segment margin, and Jirn thought it was time to close the division to increase the company's operating income. The income statement that he examined follows. Sales menu Less variable expenses Contribution margin Less traceable fixed expenses Segment margin Common food costs Nel operating income Video Audio Division Division Total $5311,800 $2,840,700 $8,172.500 3.454,000 1,646,300 5,202,300 1655,800 1,214 400 2870,200 951,400 1,279,000 2,230,600 $704,000 $164600) 639,400 589.000 351,100 When Jim broke the news, Chloe Sams, manager of the Audio division, was unsct. Chlac thought that Jim could be making a snap judgment, and suggested that he look at the division's detailed operating results. The Aucia division is compased af two groups, Streaming and CD. Streaming accounts for 75% of the divisions sales and contribution margin: CD counts for the other 25%. Streaming's traceable fixed costs are $150,800; CD. $350,800. Prepare a segment margin income statement for the Audio division that shows the segment margin of each group is the amount is negative then enter with a negative sin preceding the number, eg 5.125 or porenthesis eg 15,125) and round answers to decimal places eg 5125) Streaming Tatal Audio Division Should Jim Coston close the Audia Division? Jim should consider closin v Streaming mans of the
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