Prepare a columnar condensed income statement for Monty Company, assuming Division II is eliminated. Division IIs unavoidable fixed costs are allocated equally to the continuing divisions.

Problem 12-5 Monty Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $218,700 and the following divisional results Division IV Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations $253,000 $195,000 $501,000 $447,000 194,000 296,000250,000 48,000 $ (13,300) $ (61,000) $144,000 $149,000 197,000 69,300 62,000 61,000 Analysis reveals the following percentages of variable costs in each division. IV 76% 59 Cost of goods solod Selling and administrative expenses 40 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 72% 89 % 79 % 52 57 divisions should be 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 e.g. (45).) Division I Division II Contribution margirn Prepare an incremental analysis concerning the possible discontinuance of Division I. (Round answers to O decimal places, e.g. 1525. 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 Increase (Decrease) Continue Eliminate Contribution margin Fixed costs Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations s Prepare an incremental analysis concerning the possible discontinuance of Division II. (Round answers to O decimal places, e.g. 1525. 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 Increase (Decrease) Continue Eliminate Contribution margin Fixed costs Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations s LINK TO TEXT What course of action do you recommend for each division? Division I Division II MONTY COMPANY CVP Income Statement Divisions IV 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 operations