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Brislin Company has four operating divisions. During the first quarter of 2017 the company reported aggregate income from operations of s211,600 and the following divisional
Brislin Company has four operating divisions. During the first quarter of 2017 the company reported aggregate income from operations of s211,600 and the following divisional results. Division IV $245,000 $197,000 $504,000 $450,000 Sales Cost of goods sold 200,000 191,000 301,000 249,000 Selling and administrative expenses 72,400 63,000 58,000 50,000 Income (loss) from operations (27,400 (57,000 $145,000 $151,000 Analysis reveals the following percentages of variable costs in each division Cost of goods sold 73% 91 82 75 Selling and administrative expenses 39 50 61 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 ing the number e.g. -45 or parentheses e.g. (45).) Division I Division II Contribution margin 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).) Net Income Continue Eliminate Increase (Decrease) 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. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e g. (45).) Net Income Continue Eliminate Increase (Decrease) Contribution margin Fixed costs Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations What course of action do you reco mmend for each division? Division Division Prepare a columnar condensed income statement for Bri in Company, assuming Division II is eliminated. Division II's unavoidable fixed costs are allocated equally to the continuing divisions. (Round answers to 0 decimal places, e.g. 152 Enter negative amounts using either a negative sign preceding the number e.g. 45 or parentheses e.g. (45).)
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