PRINTER vERo ascMATO NERY FLREE RACK Exercise 8-18 Blossom, Inc. operates three divisions, Weak, Average, and Strong. As it turns out, the Weak division has the lowest operating income, and the president wants to close it. "Survival of the fittest, I say!" was his response when the Weak division's manager insisted that his division earned money for the company. Following is the most recent financial analysis for each division: Average Streng $127,800 345s,900 $520,500 Wesk Sales revanue vanatle expenss 58.e00 194.200 306,500 69.000 151700 214/000 Contrbuton margin Drect expenses 36,100 73.200 114,100 Allocated expenses 56,700 56,700 4.700 S(23,800) $21,400 $43,2o0 Operating inceme Prepare a revised income statement showing the segment margin for each diyision. Weak Average Strong Total By how much would total income change if the Weak division were dropped? by i Tutal income wil Based on the way allocated expenses are divided among the divisions, what do you think will happen to the Average division if the company continues to prepare financial statements in this way, assuming Weak was dropped? will be allocated to Average, resuiting in a $ for the division If Weak is dropped, then $ as currently reported