Pharoah 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: Sales Variable expenses Contribution margin Advertising expense Depreciation expense Corporate expenses Total fixed expenses Operating income B $2,213,000 $1.409,000 1,652,000 601,700 $561.000 $807.300 $523,000 $430,000 16,700 10.500 94,300 84,900 $634,000 $525,400 $(73,000) $281,900 $1,802,900 1,084,300 $718,600 $520,000 20,300 105.200 $645,500 $73,100 Total $5,424,900 3,338,000 $2,086.900 $1.473,000 47,500 284,400 $1,804,900 $282,000 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. Your answer is correct. Restate the income statement in segment margin format. 2213000 14 1652000 i 6017 561000 Sales Revenue Variable expenses Contribution margin Less Direct fixed expenses Advertising Depreciation Segment margin Less Common xed expenses 523000 4300 16200 105 21300 Operating profit (a) Your answer is correct. Restate the income statement in segment margin format. B Total 1409000 1802900 $ 5424900 601700 i 1084300 3338000 807300 718600 2086900 430000 i 520000 1473000 10500 20300 47500 i 366800 178300 566400 284400 282000 e Textbook and Media Attempts: 1 of 10 used (b) What would be the effect on income if product A were dropped? Net income would by $