Cullumber, Inc. operates three divisions, Weak, Average, and Strong. As it turns out, the Weak division has the lowest operating income, and the president wants to close it. "Survival of the fittest, I say!" was his response when the Weak division's manager, insisted Mark, that his division earned money for the company. Following is the most recent financial analysis for each division:

		Weak			Average		Strong
Sales revenue		$125,100			$451,500		$501,400
Variable expenses		58,700			246,300		309,300
Contribution margin		66,400			205,200		192,100
Direct expenses		37,100			78,200		110,100
Allocated expenses		69,600			69,600		69,600
Operating income		$(40,300)			$57,400		$12,400

1. Prepare a revised income statement showing the segment margin for each division.

2. By how much would total income change if the Weak division were dropped?

3. Based on the way allocated expenses are divided among the divisions, what do you think will happen to the Average division if the company continues to prepare financial statements in this way, assuming Weak was dropped?