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Brislin Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $214,200 and the following divisional
Brislin Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $214,200 and the following divisional results. Division I 11 IV Sales $254,000 $199,000 $501,000 $443,000 Cost of goods sold 204,000 189,000 301,000 247,000 Selling and administrative expenses 69,800 60,000 57,000 55,000 Income (loss) from operations $(19,800) $ (50,000) $143,000 $141,000 Analysis reveals the following percentages of variable costs in each division. 1 II III IV Cost of goods sold 67 % 90 % 82 % 75 % Selling and administrative expenses 39 62 50 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. (b2) Prepare an incremental analysis concerning the possible discontinuance of Division II. (Enter negative amounts 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 $ $ $ e Textbook and Media Save for Later Attempts: 0 of 5 used Submit
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