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Oriole Toys' management is considering eliminating product A, which has been showing a loss for several years. The company's annual income statement, is as follows:
Oriole Toys' management is considering eliminating product A, which has been showing a loss for several years. The company's annual income statement, is as follows: A B Sales Variable expenses Contribution margin Advertising expense Depreciation expense Corporate expenses Total fixed expenses Operating income $2,295.000 1.696.000 $599,000 $517,000 17,400 93,500 $627,900 $(28,900) $1,406,000 601,500 $804,500 $427,000 10,400 81,900 $519.300 $285,200 $1,812,000 1,089.300 $722,700 $521,000 22.000 106,700 $649.700 $73,000 Total $5,513,000 3,386,800 $2,126,200 $1,465,000 49,800 282.100 $1,796,900 $329,300 Advertising expense - Specific to each product. Depreciation expense - Specific to each product; no other use available, no resale value. Corporate expenses - Allocated based on number of employees. Restate the income statement in segment margin format A B $
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