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Wildhorse, 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 Chris, that his division earned money for the company. Following is the most recent financial analysis for each division Weak Average $450,000 $ 126,900 Strong $ 527,600 300,500 57.000 246,000 69,900 204,000 227,100 Sales revenue Variable expenses Contribution margin Direct expenses Allocated expenses Operating income 30,600 77,800 113,200 69,000 69,000 69,000 $(29.700) $57.200 $44.900 Prepare a revised income statement showing the segment margin for each division. Weak Average Strong Sales 126,900 450,000 527,600 Variable expense 57,000 246,000 300,500 Contribution margin 69,900 204,000 227.100 Direct expense 30,600 77,800 113,200 Segment margin 39,300 126,200 113,900 Allocated expense Operating income Strong Total $ 527,600 $ 1,104,500 300,500 603,500 227,100 501,000 113,200 221,600 $ 113,900 221,800 $ (b) By how much would total income change if the Weak division were dropped? Total income will by $ 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? If Weak is dropped, then Average will report allocated expenses of $ resulting in an enses are divided among the divisions, what do you think will happen to the Average division if the nancial statements in this way, assuming Weak was dropped? , resulting in an of $ for the division

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