Operations of Borderland Oil Drilling Services are separated into two geographical divisions: United States and Mexico. The operating results of each division for 2010 are as follows:

Corporate fixed costs are allocated to the divisions based on relative sales. Assume that all of a division's direct fixed costs could be avoided by eliminating that division.
Because the U.S. division is operating at a loss, Borderland's president is considering eliminating it.
a. If the U.S. division had been eliminated at the beginning of the year, what would have been Borderland's pre-tax income?
b. Recast the income statements into a more meaningful format than the one given.
Why would total corporate operating results change from the $108,000 loss to the results determined in part(a)?

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United States Total $10800,000 $ 3,972,000 2682,000 MexicO Sales Variable Contribution mar Direct fixed $7,200,000 $3,600,000 40,0002088, 000) (6828000) costs $2,460,000 000) $1,512,000 (490, gin 000) 1290000) costs $1,660000 2200 (1,900 margin Corporate fixed costs (2790000) 108 rating income (loss) (240000 132000