Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Brislin Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $212,000 and the following divisional

Brislin Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $212,000 and the following divisional results. Division I II III IV Sales $246,000 $195,000 $498,000 $452,000 Cost of goods sold 198,000 192,000 304,000 247,000 Selling and administrative expenses 77,000 54,000 56,000 51,000 Income (loss) from operations $ (29,000) $ (51,000) $138,000 $154,000 Analysis reveals the following percentages of variable costs in each division. I II III IV Cost of goods sold 73 % 92 % 77 % 79 % Selling and administrative expenses 41 60 48 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). The consensus is that one or both of the divisions should be discontinued.

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

Step: 3

blur-text-image

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

Financial Statement Fraud Casebook Baking The Ledgers And Cooking The Books

Authors: Joseph T. Wells

1st Edition

0470934417, 978-0470934418

More Books

Students also viewed these Accounting questions

Question

2. List the advantages of listening well

Answered: 1 week ago