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Cost of goods sold 380. 000 576.0100 430.000 Selling and administrative expenses 120. 0.0^ 207. 0100 245,000 120, 00 0 Income (loss ) from operations

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Cost of goods sold 380. 000 576.0100 430.000 Selling and administrative expenses 120. 0.0^ 207. 0100 245,000 120, 00 0 Income (loss ) from operations $ 1 45,000 ) $ 43,000 $ 98. 000 $135, 000 ) Analysis reveals the following percentages of variable costs in each division . Denver Miami San Diego Tacoma Cost of goods sold 9/056 Selling and administrative expenses* Gill Discontinuance of any division would save GAY's of the fixed costs and expenses for that division . Top management is deeply concerned about the unprofitable divisions ( Denver and Tacoma] . The Consensus is that one or both of the divisions should be eliminated . Instructions ( a ) Compute the contribution margin for the two unprofitable divisions . ( b) Prepare an incremental analysis concerning the possible elimination of' ('I'; the Denver Division* and ( 2 ) the Tacoma Division . What course of action do you recommend for each division ?" ( C ) Prepare a columnar condensed income statement using the CVP format for Pierre Manufacturing* Company , assuming !' ! ; the Denver Division is eliminated , and I z'; the unavoidable fixed costs and expenses of the Denver Division are allocated 30%' to Miami , 50%' to San Diego , and 20%/} Lo Tacoma. ( d ) Compare the total income from operations with the Denver Division (To1 , Only to total income from operations without this division

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