Blue Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $194,100 and the following divisional results.

		Division
		I		II		III		IV
Sales		$251,000		$195,000		$502,000		$446,000
Cost of goods sold		205,000		190,000		302,000		251,000
Selling and administrative expenses		75,900		62,000		60,000		54,000
Income (loss) from operations		$ (29,900)		$ (57,000)		$140,000		$141,000

Analysis reveals the following percentages of variable costs in each division.

		I			II			III			IV
Cost of goods sold		68	%		90	%		79	%		73	%
Selling and administrative expenses		39			57			49			62

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.

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 I Division II Contribution margin LINK TO TEXT Prepare an incremental analysis concerning the possible discontinuance of Division I. (Round answers to 0 decimal places, e.g. 1525. If amount decreases net income then enter the amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase (Decrease) Continue Eliminate Contribution margin Fixed costs Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations $ $ Prepare an incremental analysis concerning the possible discontinuance of Division II. (Round answers to 0 decimal places, e.g. 1525. If amount decreases net income then enter the amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Continue Eliminate Net Income Increase (Decrease) Contribution margin $ Fixed costs Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations LINK TO TEXT What course of action do you recommend for each division? Division I Division II Prepare a columnar condensed income statement for Blue Company, assuming Division II is eliminated. Division II's unavoidable fixed costs are allocated equally to the continuing divisions. (If amount decreases net income then enter the amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) BLUE COMPANY CVP Income Statement Divisions III IV Total Sales $ $ $ $ Variable costs Cost of goods sold Selling and administrative Total variable costs Contribution margin Fixed costs Cost of goods sold Selling and administrative Total fixed costs Income (loss) from operations