B. Differential Analysis >>>>>>>> SHOW YOUR WORK TO RECEIVE CREDIT! 17. Three Initial Corporation (TIC) is considering selling off the XYZ Division. The following table presents the data used in the decision. Calculate the net effect on before-tax profits if the sale is completed. SEGMENTS 123 456 XYZ TOTAL Sales $200,000 $80,000 $25,000 $305,000 Variable Costs (50.000) (60.000) (20.000) (130.000) Cont. Margin 150,000 20,000 5,000 175,000 Fixed Costs Salaries 20,000 5,000 4,000 29,000 Advertising 2,000 500 3,000 5,500 Administrative 3,000 2,000 1,000 6.000 Depreciation 6,000 2,000 2,000 10,000 R & D 5,000 5,000 1,000 11,000 Other 6,000 2,000 100 8.100 All relevant variable costs will be eliminated with the sale. Additionally, half of the salaries and administrative costs will be eliminated, and all of the depreciation and R&D costs will be eliminated. The other costs will be absorbed by the remaining segments. (15 PTS.)