Answered step by step
Verified Expert Solution
Question
1 Approved Answer
PLEASE ANSWER!!!!! Brislin Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $212,200 and the
PLEASE ANSWER!!!!!
Brislin Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $212,200 and the following divisional results. Division Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations $247,000 $198,000 $499,000 $448,000 203,000 192,000 295,000 250,000 48,000 $(25,800) $(51,000) $139,000 $150,000 69,800 57,000 65,000 Analysis reveals the following percentages of variable costs in each division. Cost of goods sold Selling and administrative expenses Il 88 % 59 IV 81% 50 71 % 76 % 38 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 Il). Consensus is that one or both of the divisions should be discontinued Compute the contribution margin for Divisions I and Il. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Division I Division II Contribution margin $ 76346 $ 4590) 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).) Net Income Continue Eliminate Increase (Decrease) Contribution margin $ 76346 $ (76346) Fixed costs Cost of goods sold 58870 29435 29435 Selling and administrative 43276 21638 21638 Total fixed expenses Income (loss) from operations 102146 51073 51073 $L- (25800)] $[ - (51073] $[ 25273) Prepare an incremental analysis concerning the possible discontinuance of Division II. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Continue Eliminate Increase (Decrease) Contribution margin (4590) $ 4590 Fixed costs Cost of goods sold 23040 11520 11520 Selling and administrative 23370 11685 11685 Total fixed expenses Income (loss) from operations 46410 23205 23205 (51000) (23205) $ 27795 What course of action do you recommend for each division? Division Continued Division II | Eliminated Prepare a columnar condensed income statement for Brislin Company, assuming Division II is eliminated. Division II's unavoidable fixed costs are allocated equally to the continuing divisions. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) BRISLIN COMPANY CVP Income Statement For the Quarter Ended March 31,2020 Divisions 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 fixed costs Income (loss) from operationsStep by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started