Patterson Corporation has four operating divisions. The budgeted revenues and expenses for each division for 2017 follows: E! (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 concerned about the unprofitable divisions (A and B) and is considering closing them for the year. Read the requirements Requl i Data Table Begin Sales Division Contr Now, Sales $ 510,000 $ 470,000 $ 970,000 $ 760,000 Cost of goods sold 400,000 380,000 520,000 450,000 160,000 140,000 225,000 205,000 Selling, general, and administrative expenses $ (50,000) $ (50,000) $ 225,000 $ 105,000 Operating income/loss Further analysis of costs reveals the following percentages of variable costs in each division: Division A B C D Cost of goods sold 90 % 89% 92% 85% Selling, general, and administrative expenses 61% 81% 72% 62% Fixed Fixed expert Total Fixed Would Choos Print Done Patterson Corporation has four operating divisions. The budgeted revenues and expenses for each division for 2017 follows: E!! (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 concerned about the unprofitable divisions (A and B) and is considering closing them for the year. Read the requirements. Requirement 1. Calculate the increase or decrease in operating income if Patterson 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. Fixed costs Division A Fixed cost of goods sold Fixed selling, general, and administrative expenses Total fixed costs Fixed costs saved by shutting down division Would operating income increase or decrease? Choose from any list or enter any number in the input fields and then continue to the next question. Patterson Corporation has four operating divisions. The budgeted revenues and expenses for each division for 2017 follows: 3! (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 concerned about the unprofitable divisions (A and B) and is considering closing them for the year. Read the requirements By how much? Does Division A's contribution margin cover its avoidable fixed costs? Requirement 2. Calculate the increase or decrease in operating income If Patterson closes division B. Begin by calculating division B's contribution margin. Division B Sales Contribution margin Now, calculate the foxed costs that will be saved by closing division B. Fixed Costs Division B Fixed cost of goods sold Fixed selling, general, and administrative expenses Total fixed costs Choose from any list or enter any number in the input fields and then continue to the next question. Patterson Corporation has four operating divisions. The budgeted revenues and expenses for each division for 2017 follows: BI! (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 concerned about the unprofitable divisions (A and B) and is considering closing them for the year. Read the requirements Division B Fixed Costs Fixed cost of goods sold Fixed selling, general, and administrative expenses Total fixed costs Fixed costs saved by shutting down division Would operating income increase or decrease? By how much? Does Division A's contribution margin cover its avoidable fixed costs? Requirement 3. What other factors should the top management of Patterson consider before making a decision? O A. Management should consider the impact on the morale of the remaining employees if the division(s) are closed. OB. Management should consider the role that the divisions product line plays relative to other product lines. O c. Both of the above. OD. 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