Valley Incorporated has three divisions, Almond, Grover and Oak. The following is the contribution margin income statement for the previous year:

	Almond	Grover	Oak	Total
Sales revenue	$ 500,000	$ 275,000	$ 225,000	$ 1,000,000
Variable costs	175,000	125,000	100,000	400,000
Contribution margin	$ 325,000	$ 150,000	$ 125,000	$ 600,000
Fixed costs	275,000	151,250	123,750	550,000
Net operating income (loss)	$ 50,000	$(1,250)	$ 1,250	$ 50,000

Of the fixed costs, $300,000 are common costs that are allocated equally to the three divisions.

Required

1. How much does Grover Division have in direct fixed costs?
2. What is Grover Division's segment margin?
3. What would Valley's net income (loss) be if the Grover Division were dropped?

Answer rating: 100% (QA)

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