lossom Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $232,400 and the following divisional results. Division I II III IV

Sales $245,000 $195,000 $495,000 $443,000

Cost of goods sold 195,000 189,000 295,000 245,000

Selling and administrative expenses 67,600 54,000 55,000 45,000

Income (loss) from operations $ (17,600) $ (48,000) $145,000 $153,000

Analysis reveals the following percentages of variable costs in each division.

I II III IV

Cost of goods sold 66 % 87 % 77 % 73 %

Selling and administrative expenses 37 57 47 57

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. Prepare an incremental analysis concerning the possible discontinuance of Division I. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Continue Eliminate Net Income Increase (Decrease) Contribution margin $ $ $ Fixed costs Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations $ $ $