Derrald Pearl Company has two divisions, Computer Consulting and Construction During the most recent year, the two divisions had the following uperating data.

1. Prepare a segment-margin income statement for Derrald Pearl Company. Include three columns-one for the company total and one for each of the two divisions 2. Based on the segment-margin income statement prepared in (1), what would happen to overall company profits if the Construction Division were to be discontinued?
3. Should either of the divisions be discontinued? Explain.

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Revenue. Contribution-margin percentage Fixed costs controllable by division managers. Fixed costs allocated by corporate headquarters Computer Consulting Construction $250,000 15% $600,000 45% $200,000 $ 30,000 $100,000 $100,000