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 Steven, that his division earned money for the company. Following is the most recent financial analysis for each division:

		Weak			Average		Strong
Sales revenue		$ 128,000			$ 453,500		$ 538,400
Variable expenses		51,900			246,700		306,200
Contribution margin		76,100			206,800		232,200
Direct expenses		33,700			75,500		110,200
Allocated expenses		70,400			70,400		70,400
Operating income		$( 28,000)			$ 60,900		$ 51,600

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

	Weak	Average	Strong	Total
Sales	$	$	$	$
Variable Expense	$	$	$	$
Contribution Margin	$	$	$	$
Direct Expense	$	$	$	$
Segment margin	$	$	$	$
Allocated Expense	-	-	-	$
Operating Income	-	-	-	$

b)By how much would total income change if the Weak division were dropped? Total Income will increase/decrease by $

c) Based on the way allocated expenses are divided among the divisions, what do you think 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 operating income/operating loss of $_______ for the division