Wildhorse Toys' management is considering eliminating product A. which has been showing a loss for several years. The company's annual income statement, is as follows:
\begin{tabular}{|c|c|c|c|c|}
\hline & A & B & C & Total \\
\hline Sales & \( \$ 2,235,000 \) & \( \$ 1,410,000 \) & \( \$ 1,806,500 \) & \( \$ 5,451,500 \) \\
\hline Variable expenses & \( 1,658,000 \) & 601,200 & \( 1,099,800 \) & \( 3,359,000 \) \\
\hline Contribution margin & \( \$ 577,000 \) & \( \$ 808,800 \) & \( \$ 706,700 \) & \( \$ 2,092,500 \) \\
\hline Advertising expense & \( \$ 520,000 \) & \( \$ 429,000 \) & \( \$ 521,000 \) & \( \$ 1,470,000 \) \\
\hline Depreciation expense & 16,700 & 10,700 & 21,500 & 48,900 \\
\hline Corporate expenses & 92,300 & 84,100 & 106,600 & 283,000 \\
\hline Total fixed expenses & \( \$ 629,000 \) & \( \$ 523,800 \) & \( \$ 649,100 \) & \( \$ 1,801,900 \) \\
\hline Operating income & \( \$(52,000) \) & \( \$ 285,000 \) & \( \$ 57,600 \) & \( \$ 290,600 \) \\
\hline
\end{tabular}
Advertising expense - Specific to each product.
Depreciation expense - Specific to each product: no other use available, no resale value.
Corporate expenses - Allocated based on number of employees.
(a)
Restate the income statement in segment margin format.
A
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B
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