Kevin Hall was reviewing the latest income statement for Wildhorse Communications. For the second year in a row, the Audio division was showing a negative segment margin, and Kevin thought it was time to close the division to increase the company's operating income. The income statement that he examined follows. Video Division Audio Division Total Sales revenue $5,309,800 $2,861,100 $8,170.900 Less variable expenses 3,667,000 1,645,000 5.312.000 Contribution margin 1,642,800 1.216.100 2.858,900 Less traceable fixed expenses 945,600 1,277,300 2.222.900 Segment margin $697,200 $(61,200) 636,000 Common fixed costs 598,000 Net operating income $38,000 When Kevin broke the news, Laura Allen, manager of the Audio division, was upset. Laura thought that Kevin could be making a decision too quickly, and suggested that he look at the division's detailed operating results. The Audio division is composed of two groups, Streaming and CD. Streaming accounts for 75% of the division's sales and contribution margin: CD accounts for the other 25%. Streaming's traceable fixed costs are $452,200: CD, $352,200.