The segmented income statement for XYZ Company for the year ended December 31, 2019, follows: XYZ COMPANY Segmented Income Statement For the Year Ended December 31, 2019 Total Company Product A Product B Product C Sales $ 592,000 $ 307,000 $ 114,000 $ 171,000 Variable expenses 280,000 154,000 58,000 68,000 Contribution margin $ 312,000 $ 153,000 $ 56,000 $ 103,000 Fixed expenses 286,000 168,000 49,000 69,000 Operating income $ 26,000 $ (15,000 ) $ 7,000 $ 34,000 The company is concerned about the performance of product A, and you have been asked to analyze the situation and recommend to the president whether to continue or discontinue the product. During your investigation, you discover that certain fixed expenses are traceable directly to each product line as indicated here: Total Company Product A Product B Product C Direct fixed expenses $102,000 $73,000 $11,000 $18,000 The remaining fixed expenses are considered to be corporatewide expenses that have been allocated to each product line based on sales revenue. Required: Letter B - as shown below

The remaining fixed expenses are considered to be corporatewide expenses that have been allocated to each product line based on sales revenue. Required: a. What will be the effect of the decision to discontinue product A on operating income? b. Assume that product A is discontinued. Prepare a segmented income statement for the remaining products. Allocate corporatewide fixed expenses as described. c. Starting with the segmented income statement, use the information you discovered during your investigation to present a more appropriately designed segmented income statement. Complete this question by entering your answers in the tabs below. Required A Required B Required Product C Assume that product A is discontinued. Prepare a segmented income statement for the remaining products. Allocate corporatewide fixed expenses as described. (Round intermediate calculations to 2 decimal places.) XYZ COMPANY Segmented Income Statement For the Year Ended December 31, 2019 Total Product B Company Sales Variable expenses Contribution margin Direct fixed expenses Common fixed expenses Operating income/loss S S $ 0 $ 0 $ 0 0 0 $ 0