1.3

Crane Manufacturing Company han four operating divisions. During the first quarter of 2022, the company reported apte Income from operations of $15.200 and the following divisional results DIVIS 5509.500 $396,000 $365,100 $177.900 287,500 246,300 270,000 151.800 Sales Cost of goods sold Selling and administrative expenses Income foss) from operations 67.600 7.600 58,300 $163.700 78.400 571,300 $33,3001 5148.500 The analysis reveals the following percentages of variable costs in each dihin 1 III IV 71% BON 75% 93 Cost oferold Selling and administrative expenses 50 39 65 70 Discontinuance of any division would save 50% of the fed costs and expenses for the division Top management is very concerned about the unprofitable divisions (ill and IV). The consensus is that the company should continue one or both of these divisions (2) Division IV Income Increase Decrease Keep Div. IV Shut Di IV Division IV Contribution margin Fixed costs Totals What course of action do you recommend for each division? Division I should be Division I should be