The following income statement has been prepared for the most recent period for the bedroom segment of a furniture & home dcor company. Segment Income Statement Bedroom Sales $950,000 Less: Variable expenses Variable manufacturing costs $285,000 Variable shipping costs 47,500 Commissions 28,500 361,000 Contribution margin 589,000 Less: Fixed expenses General factory overhead 89,500 Salary of line manager 62,500 Depreciation of equipment 51,500 Advertising 41,500 Factory rent 38,000 General admin. expenses 31,000 314,000 Operating income/(loss) 275,000 The company is deciding if it should keep or drop the bedroom division based on the following facts: General factory overhead would remain as a fixed expense if the bedroom segment is dropped. General administrative expenses would be reduced by 22% if the bedroom segment is dropped. If the company drops this segment, it will gain a contribution margin of $19,000 by manufacturing other products. The company will continue to pay rent to manufacture other products. What is the contribution margin lost if the bedroom segment is dropped? (enter as a positive number) (1 mark) What are the total fixed expenses that can be avoided if the bedroom segment is dropped? (enter as a positive number) (4 marks) | What is the contribution margin gained if the company drops the bedroom segment? (1 mark) What is the net advantage or disadvantage of dropping this segment? (1 mark) Enter a disadvantage/loss as a negative number. Negative numbers should be entered with a negative sign, not brackets. Should the bedroom segment be kept or dropped? (1 mark) The bedroom segment should be kept. The bedroom segment should be dropped