Pent by: RAVNEET SEKHON FNGT 1116 - WO2 - Summer 2020 / Chapter 12 Homework Assignment "Problem 12-5 Brisin Company has four operating division. During the first quarter of 2017, the company reported aggregate income from operat 5213,000 and the following divisional results Division 1 II III TV Sales $250,000 $200,000 $500,000 $450,000 Cost of goods sold 200,000 192,000 300,000 250,000 Selling and administrative expenses 75.000 60,000 60,000 50,000 Income (loss) from operations $ (25,000) $(52,000) $140,000 $150,000 Analysis reveals the following percentages of variable costs in each division 1 11 III IV Cost of goods sold 70% 90% 80% 75% Selling and administrative expenses 40 60 50 60 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 discontinued Compute the contribution margin for Divisions I and II. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses .. (45).) Division 1 Division II Contribution margin Prepare an incremental analysis concerning the possible discontinuance of Division 1. (Round answers to decimal places, a.. If amount decreases net income then enter the amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Continue Eliminate Increase (Decrease) Contribution margin Fixed costs Cost of goods sold Selling and administrative Totalfixed expenses Income (loss) from operations Prepare an incremental analysis concerning the possible discontinuance of Division II. (Round answers to decimal places, e.g. IT amount decreases net income then enter the amount using either a negative sign preceding the number ... -45 or parentheses .g. (45).) Continue Eliminate Net Income Increase (Decrease) Contribution margin Fixed costs Total fixed expenses Income (loss) from operations Prepare an incremental analysis concerning the possible discontinuance of Division II. (Round answers to decimal places, e.g. 1525 If amount decreases net income then enter the amount using either a negative sign preceding the number .g. -45 or parentheses .g. (45).) Net Income Continue Eliminate Increase (Decrease) Contribution margin Fixed costs Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations What course of action do you recommend for each division? Division 1 Division II Prepare a columnar condensed income statement for Brislin Company, assuming Division 1 is eliminated. Division It's unavoidable fixed costs are allocated equally to the continuing divisions. (If amount decreases net income then enter the amount using either a negative sign preceding the number e.g. -45 or parentheses e.. (45).) BRISLIN COMPANY CVP Income Statement Divisions i III TV Total Sales Variable costs Cost of goods sold Selling and administrative Total variable costs Contribution margin Fixed costs Cost of goods sold Selling and administrative Total foed costs Income (loss) from operations Question Attempts: Unlimited
