Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

(b) Prepare an incremental analysis concerning the possible discontinuance of Division I. (Round answers to 0 decimal places, e.g. 1525. Enter negative amounts using either

image text in transcribed(b) Prepare an incremental analysis concerning the possible discontinuance of Division I. (Round answers to 0 decimal places, e.g. 1525. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Division I

Continue$

Eliminate$

Net Income Increase/(Decrease)$

Contribution (as above)

Fixed Cost

COGS

S & A Expenses

Total Fixed Expenses

Income loss from Operation

(c) Prepare an incremental analysis concerning the possible discontinuance of Division II. (Round answers to 0 decimal places, e.g. 1525. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).

Division Ii

Continue$

Eliminate$

Net Income Increase/(Decrease)$

Contribution (as above)

Fixed Cost

COGS

S & A Expenses

Total Fixed Expenses

Income loss from Operation

What course of action do you recommend for each division? Division I Continued or Eliminated?

Problem 7-5A (Part Level Submission) Brislin Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $214,400 and the following d results. Division Sales $250,000 $199,000 $499,000 $443,000 Cost of goods sold 204,000 190,000 297,000 246,000 Selling and administrative expenses 76,600 55,000 56,000 52,000 Income (loss) from operations (30,600) (46,000) $146,000 $145,000 Analysis reveals the following percentages of variable costs in each division. Cost of goods sold 71% 91 81 73% Selling and administrative expenses 37 61 49 58 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. w (a) Compute the contribution margin for Divisions I and II. (Enter negative amounts using either a negative sign preceding the number e.g. -45 parentheses e g. (45) Division I Division II Contribution margin s Attempts: o of 2 used

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Executive Roadmap To Fraud Prevention And Internal Control Creating A Culture Of Compliance

Authors: Joel T. Bartow, Martin T. Biegelman

2nd Edition

1118004582, 9781118004586

More Books

Students also viewed these Accounting questions