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Anderson Publishing has two divisions: Book Publishing and Magazine Publishing. The Magazine...

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Accounting

Anderson Publishing has two divisions: Book Publishing and Magazine Publishing. The Magazine division has been losing money for the last five years and Anderson is considering eliminating that division. Andersons information about the two divisions is as follows:
Book Division Magazine Division Total
Sales Revenue $ 8,160,000 $ 3,452,300 $ 11,612,300
Cost of Goods sold
Variable manufacturing costs 2,360,0001,176,5003,536,500
Fixed manufacturing costs 1,113,5001,292,7002,406,200
Gross Profit $ 4,686,500 $ 983,100 $ 5,669,600
Operating Expenses
Variable operating expenses 171,000250,800421,800
Fixed operating expenses 2,952,0001,209,1004,161,100
Net income $ 1,563,500 $ (476,800) $ 1,086,700
Only 20 percent of the fixed manufacturing costs and 60 percent of the fixed operating expenses are directly attributable to each division. The remaining are common or shared between the two divisions.
What will be the impact on net income if the Magazine Division is eliminated?

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