The following income statement has been prepared for the most recent period for the dish soap segment of a consumer goods company Segment Income Statement Dish Soap $300,000 $150,000 15,000 15,000 180,000 120,000 Sales Less: Variable expenses Variable manufacturing costs Variable shipping costs Commissions Contribution margin Less: Fixed expenses General factory overhead Salary of line manager Depreciation of equipment Advertising Factory rent General admin. expenses Operating income / (loss) 57,000 39,000 87,500 38,000 91,500 74,500 387,500 (267,500) The company is deciding if it should keep or drop the dish soap segment based on the following facts: . General factory overhead would remain as a fixed expense if the dish soap segment is dropped. General administrative expenses would be reduced by 28% if the dish soap segment is dropped. If the company drops this segment, it will gain a contribution margin of $35,000 by manufacturing other products. The company will continue to pay rent to manufacture other products. 1. What is the contribution margin lost if the dish soap segment is dropped? (1 mark) Number 2. What are the total fixed expenses that can be avoided if the dish soap segment is dropped? (4 marks) Number 3. What is the contribution margin gained if the company drops the dish soap segment? (1 mark) Number 4. What is the net advantage or disadvantage of dropping this segment? (1 mark) Negative numbers should be entered with a negative sign, not brackets. Enter a disadvantage/loss as a negative number. Number 5. Should the dish soap segment be kept or dropped? (1 mark) O The dish soap segment should be kept. O The dish soap segment should be dropped