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Brislin Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $211,100 and the following divisional
Brislin Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $211,100 and the following divisional results. II IV Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations $246,000 198,000 76,900 $ (28,900) Division III $195,000 $498,000 192,000 304,000 55,000 56,000 $ (52,000) $138,000 $452,000 247,000 51,000 $154,000 Analysis reveals the following percentages of variable costs in each division. Cost of goods sold Selling and administrative expenses I 73 % 41 II 92 % 6 0 III 77% 48 IV 79 % 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. (a) 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 I Division II -14640 Contribution margin 69931 (61) Prepare an incremental analysis concerning the possible discontinuance of Division I. (Round answers to O decimal places, e.g. 1525. Enter negative amounts 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 Click if you would like to Show Work for this question: Open Show Work
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