Product line Operations of Borderland Oil Drilling Services are separated into two geographical divisions: United States and Mexico. The operating results of each division for the year are as follows:

	United States	Mexico	Total
Sales	$5,760,000	$2,880,000	$8,640,000
Variable costs	(3,792,000)	(1,670,400)	(5,462,400)
Contribution margin	$1,968,000	$1,209,600	$3,177,600
Direct fixed costs	(640,000)	(392,000)	(1,032,000)
Segment margin	$1,328,000	$817,600	$2,145,600
Corporate fixed costs	(1,520,000)	(712,000)	(2,232,000)
Operating income (loss)	$(192,000)	$105,600	$(86,400)

Corporate fixed costs are allocated to the divisions based on relative sales. Assume that all of a divisions direct fixed costs could be avoided by eliminating that division. Because the U.S. division is operating at a loss, Borderlands president is considering eliminating it. a. If the U.S. division had been eliminated at the beginning of the year, what would have been Borderlands pre-tax income? $Answer b. Recast the income statements into a more meaningful format than the one given. Note: Use a negative sign for expenses and losses.

	United States	Mexico	Total
Sales	Answer	Answer	Answer
Variable costs	Answer	Answer	Answer
Direct fixed costs	Answer	Answer	Answer
Segment margin	Answer	Answer	Answer
Corporate fixed costs			Answer
Operating income (loss)			Answer