Contents o AA F ... ! !! III IV Cost of goods sold 70% 90% 80% 75% Selling and administrative expenses 40 60 50 60 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. Instructions a. Compute the contribution margin for Divisions I and II. I 80,000 b. Prepare an incremental analysis concerning the possible discontinuance of (1) Division 1 and (2) Division II. What course of action do you recommend for each division? c. Prepare a columnar condensed income statement for Khiw, assuming Division II is eliminated. (Use the CVP format.) Division Il's unavoidable fixed costs are allocated equally to the continuing divisions. Income III 132,800 d. Reconcile the total income from operations (213,000) with the total income from operations without Division 11 Continuing Case ENG A) 7:19 pm Contents o AA F ... ! !! III IV Cost of goods sold 70% 90% 80% 75% Selling and administrative expenses 40 60 50 60 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. Instructions a. Compute the contribution margin for Divisions I and II. I 80,000 b. Prepare an incremental analysis concerning the possible discontinuance of (1) Division 1 and (2) Division II. What course of action do you recommend for each division? c. Prepare a columnar condensed income statement for Khiw, assuming Division II is eliminated. (Use the CVP format.) Division Il's unavoidable fixed costs are allocated equally to the continuing divisions. Income III 132,800 d. Reconcile the total income from operations (213,000) with the total income from operations without Division 11 Continuing Case ENG A) 7:19 pm