*Problem 12-5 Sarasota Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from certions Division Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations $250,000 204,000 76,600 3 (30,600) $199,000 190,000 55,000 $ (46,000) $499,000 297,000 56,000 $146,000 $443,000 246,000 52.000 $145,000 Analysis reveals the following percentages of variable costs in each division I Cost of goods sold Selling and administrative expenses 71% 37 II 91 61 TV 73% 81% 9 4 Discontinuance of any division would save 50% of the fined 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 be discontinued Compute the contribution margin for Divisions 1 and 11. (Enter negative amounts using either a negative sign preceding the number .g.-5 or parentheses eg. (45). Division 1 Division II Contribution margin Prepare an incremental analysis concerning the possible discontinuance of Division 1. Round answers to sign preceding the number eg.-5 or parentheses g. (45).) decimal e s 1525. Iam decreases et income the enter the amount Continue Eliminate Increase (Decrease Contribution margin Foxed costs Cost of goods sold Selling and administrative Total Fixed expenses Income (los) from operations Hound answers to decimal places . 1525. If amont decreases net income there the Prepare an incremental analysis concerning the possible discontinuance of ereceding the number eg er parentheses Prepare an incremental analysis concerning the possible discontinuance of Dion II. (Ro on preceding the member eg.-5 or parent s . (05 Continue Contribution margin Pored costs Cost of goods sold Selling and administrative Total fixed expenses Income ( s) from operations What course of action do you recommend Division Division II and income statement for Sarasota Company, assuming Division It is eliminated Division I unavoidable fixed cos we tocated equal to the continuing divisions. (If amount de 5 or parentheses (45).) (lamount decreases el Prepare a columnar condensed income statement for Sarasota Company, assuming Division It is inated. Division Ir's unavoidable feed costs are allocated equally to the continuing then enter the amount using either a negative sign preceding the number . -45 or parentheses (45).) SARASOTA COMPANY CVP Income Statement Divisions III TV Sales Variable costs Cost of goods sold Selling and administrative Total variaste costs Contribution margin Faxed costs Cost of goods sold Selling and administrative Total fixed costs Question Attempts 10 used Income (los) from operations