Brislin Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $216,400 and the following divisional results.

		Division
		I		II		III		IV
Sales		$250,000		$199,000		$499,000		$443,000
Cost of goods sold		204,000		189,000		297,000		246,000
Selling and administrative expenses		76,600		54,000		56,000		52,000
Income (loss) from operations		$ (30,600)		$ (44,000)		$146,000		$145,000

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

		I			II			III			IV
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.

Contribution margin		continue		eliminate		net income increase/decrease
Fixed costs
Cost of goods sold
Selling and administrative
Total fixed expenses
Income (loss) from operations		$		$		$