Situation One: Decision- Making Elimination Segment

Allington Manufacturing Company operates three segments. The information of income and expenses for the three segments present in this table.

Allington Manufacturing Company

Income Statement for the Year Ended December 31,2022

Accounts Segment of the Company

Segment A Segment B Segment C

Sales revenue $330,000 $480,000 $500,000

Cost of goods sold ($242,000) ($184,000) ($190,000)

Sales Commissions ($30,000) ($44,000) ($55,000)

Contribution Margin $58,000 $252,000 $255,000

Fixed Expenses of all company ($90,000) ($90,000) ($90,000)

Fixed Expense for specific segment ($16,000) ($20,000) ($18,000)

Net Income (Net loss) ($48,000) $142,000 $147,000

Instructions: Prepare a differential analysis report to see if you decide to close segment A. The company should close segment A, yes or no because. Recommendations that you can give as an accountant.