The president of Ravens, Inc., atended a seminar about the contribution margin model and returned to her company full of enthusiasm about it. She requested that last year's traditional model income statement be revised, and she received the following report: Division Total Sales Variable expenses Contribution margin Fixed expenses Net income (loss) $ 412,000 $164.000 $104,000 $144,000 78,000 66,000 56,000 44,00066,000 126000 4200060038 003 $ 40,000 14.000 $ (2.000) S 28,000 246,000 108,000 60,000 The president was told that the fixed expenses of $126,000 included $88,200 that had been split evenly between divisions because they were general corporate expenses. After looking at the statement, the president exclaimed, "I knew it! Division B is a drag on the whole company. Close it down Required: a. Evaluate the president's remark O The president's remark ignores the misleading result of arbitrariy allocated fixed expenses O The presidents remark ignores the misleading resuit of arbitrarily allocated variable expanses. b. Calculate what the company's net income would be if Division 8 were closed down. c. What is the policy statement related to the allocation of fixed expenses. O Never arbitrarily allocate fixed expenses O Never arbitranly allocate variable expenses