Keep or Drop AudioMart is a retailer of radios, stereos, and televisions. The store carries two portable sound systems that have radios, tape players, and speakers. System A, of slightly higher quality than System B, costs $20 more. With rare exceptions, the store also sells a headset when a system is sold. The headset can be used with either system. Variable-costing income statements for the three products follow: System A System B Headset Sales $47,500 $ 32,500 $8,000 Less: Variable expenses 22,000 25,500 3,200 Contribution margin $25,500 $ 7,000 $4,800 Less: Fixed costs* Operating income 10,000 $15,500 18,000 2,700 $(11,000) $2,100 *This includes common fixed costs totalling $18,000, allocated to each product in proportion to its revenues. The owner of the store is concerned about the profit performance of System B and is considering dropping it. If the product is dropped, sales of System A will increase by 39%, and sales of headsets will drop by 25%. Required: 1. Prepare segmented income statements for the three products. For the allocation of the common fixed costs, compute the percentage of revenue first (in the order of the mathematical operations). In your computations, round any division to two decimal places and use rounded amounts in subsequent computations. Then, round your final answers to the nearest dollar. AudioMart Segmented Income Statement