PART A

Mia D$.,$ controller for Mia Machines, has prepared the following financial information for the most recent period showing profitability of its three divisions:

$\backslash$table$[[,$Appliance,Electronics,Furniture$],[$Sales$,$$$102,000,$$$108,000,$$$120,000],[$Variable expenses,$86,000,92,000,114,000],[$Contribution margin,$16,000,16,000,6,000],[$Fixed expenses:,,,$],[$Factory insurance,$1,000,1,400,2,200],[$Depreciation$,2,000,2,600,3,600],[$Advertising$,600,600,600],[$Utilities$,800,1,000,1,200],[$Operating income,$$11,600,$$$10,400,($$$1,600)]]$

The factory insurance and advertising assigned to the furniture division are avoidable if the division is discontinued. Depreciation will remain unchanged if a division is dropped. Discontinuing furniture will reduce the utilities by $$800.$

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