CALCULAT FULL SCREEN PRINTER V Question 5 Sarasota Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $214,400 and the following divisional results. Division I II III IV Sales $250.000 $199,000 $499.000 $443.000 Cost of goods sold 204,000 190,000 297,000 246,000 Selling and administrative expenses 76,600 55,000 56,000 52,000 Income (loss) from operations $ (30,600) $ (46,000) $145,000 $145,000 Analysis reveals the following percentages of variable costs in each division. I III IV II 91 % Cost of goods sold Selling and administrative expenses 71 % 37 81 % 49 73 % 58 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 preceding the number e.g. -45 or parentheses e.g. (45).) Division I Division II Contribution margin S S LINK TO TEXT Prepare an incremental analysis concerning the possible discontinuance of Division I. (Round answers to 0 decimal places, e.g. 1525. If amount decreases net income then enter the amount 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 LINK TO TEXT Prepare an incremental analysis concerning the possible discontinuance of Division II. (Round answers to 0 decimal places, e.g. 1525. If amount decreases net income then enter the amount 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 Continue Eliminate Net Income Increase (Decrease) Contribution margin Fixed costs Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations LINK TO TEXT What course of action do you recommend for each division? Division 1 Division 11 LINK TO TEXT Prepare a columnar condensed income statement for Sarasota Company, assuming Division II is eliminated. Division II's unavoidable fixed costs are allocated equally to the continuing divisions. (If amount decreases net income then Prepare a columnar condensed income statement for Sarasota Company, assuming Division II is eliminated. Division II's unavoidable fixed costs are allocated equally to the continuing divisions. (If amount decreases net income then enter the amount using either negative sign preceding the number e.g. -45 or parentheses e.g. (45).) SARASOTA COMPANY CVP Income Statement Divisions I III IV Total Sales Variable costs Cost of goods sold Selling and administrative Total variable costs Contribution margin Fixed costs Cost f goods sold Selling and administrative Total fixed costs Income (loss) from operations