10.25 (LO 2) Excel Segment margin income statement Jim Coston was reviewing the latest income statement for Trenton Communications. For the second year in a row, the Audio division was showing a negative segment margin, and Jim thought it was time to close the division to increase the company's operating income. The income statement that he examined follows. Video Division Audio Division Total Sales revenue $5,300,000 $2,860,000 $8,160,000 Less variable expenses 3,650,000 1,645,000 5,295,000 Contribution margin 1,650,000 1,215,000 2,865,000 Less traceable fixed expenses 943,000 1,275,000 2,218,000 Segment margin 707,000 $ (60,000) 647,000 Common fixed costs 555,000 Net operating income 92,000 When Jim broke the news, Chloe Sams, manager of the Audio division, was upset. Chloe thought that Jim could be making a decision too quickly, and suggested that he look at the division's detailed operating results. The Audio division is composed of two groups, Streaming and CD. Streaming accounts for 75% of the division's sales and contribution margin; CD accounts for the other 25%. Streaming's traceable fixed costs are $450,000; CD, $350,000