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 division's 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

(c)

Your answer is partially correct.

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 $ 102300. (Correct)

resulting in an select an option operating income. (correct)

of $ ??????????? for the division.