Problem 16-32 (Algo) Continue or discontinue a segment? LO 16-2, 16-3 The segmented income statement for XYZ Company for the year ended December 31, 2022, follows: Sales Variable expenses Contribution margin Fixed expenses Operating income XYZ COMPANY Segmented Income Statement For the Year Ended December 31, 2022 Total Company Product A $ 603,000 273,000 $ 330,000 291,000 $ 39,000 $ 299,000 150,000 $ 149,000 167,000 Product B $ 115,000 54,000 $ 61,000 51,000 $ (18,000) $ 10,000 Product C $ 189,000 69,000 $ 120,000 73,000 $ 47,000 The company is concerned about the performance of product A, and you have been asked to analyze the situation and recommend t the president whether to continue or discontinue the product. During your investigation, you discover that certain fixed expenses are traceable directly to each product line as indicated here: Direct fixed expenses $ 101,000 Total Company Product A $ 76,000 Product B $ 9,000 Product C $ 16,000 The remaining fixed expenses are considered to be corporatewide expenses that have been allocated to each product line based on sales revenue. Required: a. What will be the effect of the decision to discontinue product A on operating income? b. Assume that product A is discontinued. Prepare a segmented income statement for the remaining products. Allocate corporatewid fixed expenses as described. c. Starting with the segmented income statement, use the information you discovered during your investigation to present a more appropriately designed segmented income statement.