Sheridan, Inc. operates three divisions, Weak, Average, and Strong. As it turns out, the Weak division has the lowest operating income, and the president wants to close it. Survival of the fittest, I say! was his response when the Weak divisions manager, insisted Richard, that his division earned money for the company. Following is the most recent financial analysis for each division: Weak Average Strong Sales revenue $127,900 $448,000 $539,400 Variable expenses 56,600 245,600 305,200 Contribution margin 71,300 202,400 234,200 Direct expenses 37,900 71,300 116,500 Allocated expenses 68,200 68,200 68,200 Operating income $(34,800) $62,900 $49,500

Prepare a revised income statement showing the segment margin for each division.

Based on the way allocated expenses are divided among the divisions, what do you thing will happen to the average division if the company continues to prepare financial statements in this way, assuming Weak was dropped? If Weak is dropped, then Average will report allocated expenses of $ , Resulting in an income/loss of $ for the division.