Refer to Exhibit 7-4. If allocated fixed costs are based on sales revenue for each product line as a proportion of total sales revenue, what is the profit or (loss) for Color?

		$8,500
		$16,000
		$31,000
		$13,000
		None of the answer choices is correct.

Exhibit 7-4 The following segmented annual income statement is for Paper Products, Inc. Sales revenue Variable costs Contribution margin Direct fixed costs Allocated fixed costs Profit (loss) Product Lines Plain Lined $25,000 $100,000 15.000 50.000 $10,000 $50.000 4,000 6.000 Color $125,000 85.000 $ 40,000 9.000 Total $250,000 150.000 $100,000 19.000 45,000