Division A Sales i Requirements 1. Calculate the increase or decrease in operating income if Ainsley closes 2. Calculate the increase or decrease in operating income if Ainsley closes 3. What other factors should the top management of Ainsley consider before division A. division B. making a decision? PrintDone Choose from any list or enter any number in the input fields and then continue to the ne Save for Later Subm This Quiz: 100 pts p 4 of 4 each division for 2017 follows: top management is very concerned about the unprofitable divisions (A and B) and is considering closing th Data Table Division Sales Cost of goods sold Selling, general, and administrative expenses $ 504.000 S 948,000 $ 960,000 $ 1.240,000 440.000930,000 765,000 925,000 96,000202,500 144,000 210,000 (32.000) $(184,500) $51,000$ 105,000 Further analysis of costs reveals the following percentages of variable costs in each division: Cost of goods sold Selling. general, and administrative expenses 90% 85 % 60% 80% 90 % 50% 50% 60% Print Done to the next question mathxi.com EntertainMe Corporation Manufactures An Take a Test fatou mboob gmal conm ACC 440 Hybrid Course-Spring 2019 Quiz: Chapter 11 Homework 4 of 4 This Question: 25 pts Ainsley Corporation has tour operating divisions. The budgeted revenues and expenses for each division for 2017 follows: (Click to view the results of each division.) Closing down any division wou or the year Read the requirements ld result in sangs of 40% of the fixed costs of that division. Top management is very concerned Requlrement 1. Calculate the increase or decrease in operating income if Ainsley closes division A Begin by calculating Division A's contribution margin Division A Sales Contribution margin Now, calculate the fixed costs that will be saved by closing division A. Division A Fixed cost of goods sold Fixed selling, general, and administrative expenses Total fioxed costs Fixed costs saved by shuting down divisiorn Operating income would by $ it Ainsley closes division A. Division A's contribution margin ts avoidable foxed costs hoose from any list or enter any number in the input fields and then continue to the next question Quiz: Chapter 11 Homework 4 of 4 This Question: 25 pts Ainsley Corporation has four operating EEB(Click to view the results of each division.) Closing down any division would result in savings of 40% of the fixed costs of that division. Top management is very concerne for the year divisions. The budgeted revenues and expenses for each division for 2017 follows Read the requirements Requirement 2 Calculate the increase or decrease in operating income if Ainsley closes division B Begin by calculating division B's contribution margin Division B Sales Contribution margin Now, calculate the fixed costs that will be saved by closing division B Division B Fixed cost of goods sold Fxed seiling, general, and administrative expenses Total fixed costs Fixed costs saved by shutting down division Operating income would by $ l Ainsley closes division 8. Division 8's contribution margin its its avoidable fixed costs. Choose from any list or enter any number in the input fields and then continue to the next question. d opsts saved by shutting down division erating income would by $ if Ainsley closes division B. Division B's contribubo ts avoidable fixed costs equirement 3. What other factors should the top management of Ainsley consider before making a decision? A. Management should consider the role that the divisions' product line plays relative to other product lines OB. Management should consider the impact on the morale of the remaining employees if the division(s) are closed O C. Both of the above. O D. Neither of the above, management should make this decision relying only on financial data. Choose from any list or enter any number in the input fields and then continue to the next question. Save for Later 3 5 6 8
