Problem 16-32 (Algo) Continue or discontinue a segment? LO 2, 3 The segmented income statement for XYZ Company for the year ended December 31, 2019, follows: Sales Variable expenses Contribution margin Fixed expenses Operating income XYZ COMPANY Segmented Income Statement For the Year Ended December 31, 2019 Total Company $596,000 277,000 $319,000 282,000 Product A Product B Product C $171,000 $301,000 149,000 $152,000 $124,000 59,000 $ 65,000 50,000 $ 37,000 162,000 $(10,000) $ 15,000 69,000 $102,000 70,000 $ 32,000 The company is concerned about the performance of product A, and you have been asked to analyze the situation and recommend to 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 Total Company Product A $102,000 $75,000 Product B Product C $8,000 $19,000 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 corporatewide 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 Complete this question by entering your answers in the tabs below. Required A Required B Required C What will be the effect of the decision to discontinue product A on operating income? Operating income will for the XYZ Company if it descontinues Product A Required B >