Problem10-25(PartLevelSubmission)

TrentWeaverwasreviewingthelatestincomestatementforTarynEnterprises.Forthesecondyearinarow,theCollectiblesdivisionwasshowinganegativesegmentmargin,andTrentthoughtitwastimetoclosethedivisiontoincreasethecompanysoperatingincome.Theincomestatementthatheexaminedfollows.

	Promotions Division		Collectibles Division		Total
Revenue	$5,317,000		$2,860,600		$8,177,600
Lessvariableexpenses	3,666,300		1,649,300		5,315,600
Contributionmargin	1,650,700		1,211,300		2,862,000
Lesstraceablefixedexpenses	950,700		1,276,700		2,227,400
Segmentmargin	$700,000		$(62,400	)	634,600
Commonfixedcosts					579,000
Netoperatingincome					$55,600

WhenTrentbrokethenews,TaylorTatum,manageroftheCollectiblesdivision,wasupset.TaylorthoughtthatTrentcouldbemakingasnapjudgment,andsuggestedthathelookatthedivisionsdetailedoperatingresults.TheCollectiblesdivisioniscomposedoftwogroups,SportsMemorabiliaandCoinsandStamps.SportsMemorabiliaaccountsfor60%ofthedivisionssalesandcontributionmargin;CoinsandStampsaccountsfortheother40%.SportsMemorabiliastraceablefixedcostsare$811,000;CoinsandStamps,$245,000.

*(a)

PrepareasegmentmarginincomestatementfortheCollectiblesdivisionthatshowsthesegmentmarginofeachgroup.(Iftheamountisnegativethenenterwithanegativesignprecedingthenumbere.g.-5,125orparenthesis.e.g.(5,125)andRoundanswersto0decimalplaces,e.g.5,125.)

		SportsMemorabilia		CoinsandStamps		TotalCollectiblesDivision
Revenue		$		$		$
Less : Variableexpenses
Contributionmargin
Traceablefixedexpenses
Segmentmargin		$		$
Commonfixedexpenses
Operatingincome						$

Attempts:1of1used

*(b)

Whichgroup/groupsshouldTrendWeaverclose?

Trentshouldconsiderclosing

.