Question A-C

-15 Crane, 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 Paul that his division earned money for the company. Following is the most recent financial analysis for each division: Weak Average Strong $126,600 $451.000 $S45,600 Sales revenue Variable expenses Contribution margin 54,900 246,200 306,800 71,700 204,800 238,800 39.000 79,300 110,400 Direct expenses Allocated expenses 69,400 69,400 69,400 $(36,700) $56,100 Operating income 559.000 (a) -/5 Prepare a revised income statement showing the segment margin for each division. Weak Average Strong Segment margin Operating income Variable expense Sales Direct costs $ 5 $ Contribution margin Allocated expense (5) By how much would total income change if the Weak division were dropped? Total income will bys e Textbook and Media Attempts: 0 of used Summer Swetor Later (c) 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? resulting inan 3. If Weak is dropped, then Average will report allocated expenses of