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(b) Prepare a columnar condensed income statement for Brislin Company, assuming Division II is eliminated. Division IIs unavoidable fixed costs are allocated equally to the
(b) Prepare a columnar condensed income statement for Brislin Company, assuming Division II is eliminated. Division IIs unavoidable fixed costs are allocated equally to the continuing divisions.
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Carla Vista Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $ 204,400 and the following divisional results. Division II MI IV Sales $ 253,000 $ 195,000 $ 504,000 $ 446,000 Cost of goods sold 199,000 192,000 300,000 248,000 Selling and administrative expenses 75,600 60,000 64,000 55,000 Income (loss) from operations $ ( 21,600) $(57,000) $ 140,000 $ 143,000 Analysis reveals the following percentages of variable costs in each division. Analysis reveals the following percentages of variable costs in each division. II IV Cost of goods sold 74 % 89 % 78 % 73 % Selling and administrative expenses 38 57 52 60 Discontinuance of any division would save 50% of the fixed costs and expenses for that division. Top management is very concerned about the unprofitable divisions (I and II). Consensus is that one or both of the divisions should be discontinued. Your answer is correct. Compute the contribution margin for Divisions I and II. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Division Division 11 Contribution margin $ 77.012 $ - 10,080 e Textbook and Media Assistance Used e Textbook Prepare an incremental analysis concerning the possible discontinuance of Division I. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase (Decrease) Continue Eliminate Contribution margin $ 77,012 0 $ -77,012 Fixed costs Cost of goods sold 51,740 i 25,870 i 25,870 Selling and administrative 46,872 i 23,436 i 23,436 Total fixed 98,612 i 49,306 i 49,306 expenses Income (loss) from operations $ -21,600 $ -49,306 $ -27,706 Prepare an incremental analysis concerning the possible discontinuance of Division II. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase (Decrease) Continue Eliminate Contribution margin $ 253000 $ 195000 $ 504000 Fixed costs Cost of goods sold Selling and administrative Idol boll DI!! Total fixed expenses Income (loss) from operations $ $ $Step by Step Solution
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