Crane Manufacturing Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $161,300 and the following divisional results:

		Division
		I		II		III		IV
Sales		$504,200		$391,400		$311,500		$177,900
Cost of goods sold		281,000		242,400		271,200		154,800
Selling and administrative expenses		66,300		74,600		62,400		71,000
Income (loss) from operations		$156,900		$74,400		$(22,100)		$(47,900)

The analysis reveals the following percentages of variable costs in each division:

		I			II			III			IV
Cost of goods sold		68%			91%			75%			90%
Selling and administrative expenses		40			48			65			70

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 (III and IV). The consensus is that the company should discontinue one or both of these divisions.

Calculate the contribution margin for divisions III and IV. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		Divisions III		Divisions IV
Contribution margin

Prepare an incremental analysis for the possible discontinuance of (1) division III and (2) division IV. (Round answers to 0 decimal places, e.g. 125. Enter all negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.) (1) Division III

Division III:		Keep Div. III			Shut Div. III			Income Increase (Decrease)
Contribution margin		$enter a dollar amount			$enter a dollar amount			$enter a dollar amount
Fixed costs		enter a dollar amount			enter a dollar amount			enter a dollar amount
Totals		$enter a total amount			$enter a total amount			$enter a total amount

(2) Division IV

Division IV:		Keep Div. IV			Shut Div. IV			Income Increase (Decrease)
Contribution margin		$enter a dollar amount			$enter a dollar amount			$enter a dollar amount
Fixed costs		enter a dollar amount			enter a dollar amount			enter a dollar amount
Totals		$enter a total amount			$enter a total amount			$enter a total amount

What course of action do you recommend for each division?

Division III should be select an option continuedeliminated.

Division IV should be select an option eliminatedcontinued.

Prepare a condensed income statement in columns for Crane Manufacturing, assuming division IV is eliminated. Use the CVP format. Division IV's unavoidable fixed costs are allocated equally to the continuing divisions. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.)

CRANEMANUFACTURING COMPANY CVP Income Statement choose the accounting period March 31, 2022For the Quarter Ended March 31, 2022For the Year Ended March 31, 2022
		Div I		Div II		Div III		Total
select an income statement item Contribution marginSalesNet income / (loss)Variable costsFixed costs		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
select an income statement item SalesVariable costsFixed costsContribution marginNet income / (loss)		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a summarizing line for the first part Variable costsContribution marginSalesNet income / (loss)Fixed costs		enter a total amount for the first part		enter a total amount for the first part		enter a total amount for the first part		enter a total amount for the first part
select an income statement item SalesContribution marginNet income / (loss)Variable costsFixed costs		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a closing name for this statement Variable costsContribution marginNet income / (loss)SalesFixed costs		$enter a total net income or loss amount		$enter a total net income or loss amount		$enter a total net income or loss amount		$enter a total net income or loss amount

Reconcile the total income from operations of $161,300 with the total income from operations without division IV.

Income from operations with Division IV		$enter a dollar amount
Incremental income from eliminating Division IV		$enter a dollar amount
Income from operations without Division IV		$enter a total amount