"Exercise 8-18 Pharoah, 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 that his division earned money for the company Following is the most recent financial analysis for each division Sales revenue Variable expenses Contribution margin 68,600 148,500 245,200 Direct expenses Allocated expenses 56,400 56,400 56,400 Operating income $(24,500) $13,300 $76,400 Weak Average Strong 57,300 195,000 302,900 36,700 78,800 112,400 $125,900 $343,500 $548,100 Prepare a revised income statement showing the segment margin for each divisiorn Weak Average Strong Total By how much would total income change if the Weak division were dropped? Total income will 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? by $ If Weak is dropped, then $ will be allocated to Average, resulting in a$ for the division as currently reported