Question
Carla Vista Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $211,400 and the
Carla Vista Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $211,400 and the following divisional results. Division IV Sales $250,000 $199,000 $498,000 $449,000 Cost of goods sold 204,000 Selling and administrative expenses 74,600 63,000 192,000 295,000 247,000 60,000 49,000 Income (loss) from operations $(28,600) $(56,000) $143,000 $153,000 Analysis reveals the following percentages of variable costs in each division. 1 IV Cost of goods sold 72% 88 % 80 % 76 % Selling and administrative expenses 40 60 51 61 Discontinuance of any division would save 50% of the fixed costs and expenses for that division.
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