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Manageral Accounting help please. Can someone assist me with answering letter C? But would also to check if my answers are correct for the others.
Manageral Accounting help please. Can someone assist me with answering letter C? But would also to check if my answers are correct for the others.
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Consider the following information regarding Wayne Manufacturing Company and the following instructions. This is similar to Problems 20-SA and 20-5B in our textbook. Wayne Manufacturing Company has four operating divisions. During the first quarter of 2016, the company reported the divisional results shown below and aggregate income shown below. Aggregate Income Division: North South East West 454,410$ 267,300 53,460 133,650 $ 276,210 $ 240,570 57,915 (22,275) $ 347,490 $ Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations 160,380 133,650 62,370 (35,640) $ 129,195 222,750 71,280 53,460 $ Analysis reveals the following percentages of variable costs in each division. Division: North South East West Cost of goods sold Selling and administrative expenses 70% 40% 75% 65% 90% 70% 80% 50% 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 (East and West). Consensus is that one or both of the divisions should be discontinued. Instructions Your solutions should be clearly labeled on Solutions of this workbook. (a) Compute the contribution margin for the East and West Divisions. fSee illustration 20-17for guidance, if needed.) (b) Prepare an incremental analysis concerning the possible discontinuance of (1) East Division and (2) West Division. What course of action do you recommend for each division? Should either be closed? (See illustration 20-18 for guidance, if needed.) (c) Prepare a columnar condensed income statement for Wayne Manufacturing, assuming the division(s) that should be eliminated ae eliminated. Use the CVP format. Remember: Closed division's unavoidable fixed costs are allocated equally to the continuing divisions. (See llustrations 20-16 and 20-17 for guidance, if needed.,)Step by Step Solution
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