Please answer both parts. Thank you!

Case 8-69 Keep or Drop Jan Shumard, president and general manager of Danbury Company, was concerned about the future of one of the company's largest divisions. The division's most recent quarterly income OBJECTIVE 12 statement follows: $3,751,500 ls M 2,722,400 no Sales Less: Cost of goods sold Gross profit Less: Selling and administrative expenses Operating (loss) $1,029,100 1,100,000 $ (70,900) Jan is giving serious consideration to shutting down the division because this is the ninth con- secutive quarter that it has shown a loss. To help him in his decision, the following additional information has been gathered: The division produces one division sells 50% of its output to another division within the company for $83 per unir (full manufacturing cost plus 25%). The internal price is set by company policy. If the division is shut down, the user division will buy the part externally for $100 per unit. The fixed overhead assigned per unit is $20. There is no alternative use for the facilities if shut down. The facilities and equipment will be sold and the proceeds invested to produce an annuity of $100,000 per year. Of the fixed selling and administrative expenses, 30% represent allocated expenses from corporate headquarters. Variable selling expenses are $5 per unit sold for units sold externally. These expenses are avoided for internal sales. No variable administrative product at a selling price of $100 to outside parties. The expenses are incurred. Required: 1. Prepare an income statement that more accurately reflects the division's profit performance. 2. Should the president shut down the division? What will be the effect on the company's profits if the division is closed