Prepare a condensed income statement in columns for Sandhill Manufacturing, assuming division IV is eliminated. Use the CVP format. Division IV's unavoidable fixed costs are allocated equally to the continuing divisions. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e-g-(45). While alternate approaches are possible, irrelevant foed costs should be included in both options when solving this problem.) SANDHILLMANUFACTURING COMPANY CVD Income Statement Div III Total March 31, 2022 For the Quarter Ended March 31, 2022 For the Year Ended March 31, 2022 $ $ $ $ (2) Division IV Income Increase (Decrease) Keep Div. IV Shut Div. IV B $ $ 5 $ $ What course of action do you recommend for each division? Division III should Division IV should continued eliminated Sandhill Manufacturing Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $150,900 and the following divisional results: Division 1 II III IV Sales $506.200 $399,700 $310.700 $177,100 295,200 271.200 153,600 Cost of goods sold Selling and administrative expenses Income (loss) from operations 247,400 74,000 64.600 63.400 73,400 $146,400 $78,300 $123,900) $149.900) The analysis reveals the following percentages of variable costs in each division: II III IV 68% 92% 74% 91% Cost of goods sold Selling and administrative expenses 39 52 65 70 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 (III and IV). The consensus is that the company should discontinue one or both of these divisions. Calculate the contribution margin for divisions II and IV. (Enter negative amounts using either a negative sign preceding the number e... -45 or parentheses eg. (451) Divisions III Divisions IV Contribution margin $ $ Prepare an incremental analysis for the possible discontinuance of (1) division III and (2) division IV. (Round answers to 0 decimal places, e.g. 125. Enter all negative amounts using either a negative sign preceding the number eg.-45 or parentheses e-g- (45). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.) (1) Division III Keep Div. III Shut Div. 111 Division III: Contribution margin $ $ $ Fixed costs Totals (2) Division IV Inco Incre (Decre Keep Div. IV Shut Div. IV Division IV: Contribution margin Fixed costs Totals What course of action do you recommend for each division? Division III should be Division IV should be Prepare a condensed income statement in columns for Sandhill Manufacturing, assuming division IV is eliminated. Use the CVP format. Division IV's unavoidable fixed costs are allocated equally to the continuing divisions. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e-g-(45). While alternate approaches are possible, irrelevant faxed costs should be included in both options when solving this problem.) SANDHILLMANUFACTURING COMPANY CVP Income Statement + Div! Div II Reconcile the total income from operations of $150,900 with the total income from operations without division IV. $ Income from operations with Division IV Incremental income from eliminating Division IV $ Income from operations without Division IV $
