Trump Forest Corporation operates two divisions, the Timber Division and the Consumer Division. The Timber Division manufactures and sells logs to paper manufacturers. The Consumer Division operates retail lumber mills which sell a variety of products in the do-it-yourself homeowner market. The company is considering disposing of the Consumer Division since it has been consistently unprofitable for a number of years. The income statements for the two divisions for the year ended December 31, 2019 are presented below:

		Timber Division					Consumer Division						Total
Sales			$	1,500,000				$	500,000					$	2,000,000
Cost of goods sold				900,000					350,000						1,250,000
Gross profit				600,000					150,000						750,000
Selling & administrative expenses				250,000					180,000						430,000
Net income			$	350,000				$	(30,000	)				$	320,000

In the Consumer Division, 70% of the cost of goods sold are variable costs and 35% of selling and administrative expenses are variable costs. The management of the company feels it can save $45,000 of fixed cost of goods sold and $50,000 of fixed selling expenses if it discontinues operation of the Consumer Division.

Determine whether the company should discontinue operating the Consumer Division. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). Do not leave any field blank. Enter 0 for the amounts. List variable expenses before fixed expenses.)

		Continue		Eliminate		Net Income Increase (Decrease)
Net Income / (Loss)Cost of Goods SoldSelling and Administrative ExpenseVariable ExpensesFixed ExpensesContribution MarginSales		$		$		$
Contribution MarginNet Income / (Loss)Fixed ExpensesCost of Goods SoldSalesSelling and Administrative ExpenseVariable Expenses
SalesSelling and Administrative ExpenseNet Income / (Loss)Contribution MarginFixed ExpensesCost of Goods SoldVariable Expenses
SalesNet Income / (Loss)Variable ExpensesFixed ExpensesContribution MarginSelling and Administrative ExpenseCost of Goods Sold
Cost of Goods SoldSalesSelling and Administrative ExpenseFixed ExpensesNet Income / (Loss)Contribution MarginVariable Expenses
Contribution MarginSalesNet Income / (Loss)Fixed ExpensesVariable ExpensesSelling and Administrative ExpenseCost of Goods Sold
Fixed ExpensesNet Income / (Loss)Selling and Administrative ExpenseCost of Goods SoldContribution MarginSalesVariable Expenses
SalesContribution MarginSelling and Administrative ExpenseFixed ExpensesNet Income / (Loss)Cost of Goods SoldVariable Expenses
Selling and Administrative ExpenseCost of Goods SoldFixed ExpensesNet Income / (Loss)SalesVariable ExpensesContribution Margin		$		$		$

The company should notshould continue the Consumer Division.

If the company had discontinued the division for 2019, determine what net income would have been.

Net Income

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