Problem 20-05A a, b1-b3, c (Part Level Submission)

Brislin Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $212,000 and the following divisional results.

		Division
		I		II		III		IV
Sales		$246,000		$195,000		$498,000		$452,000
Cost of goods sold		198,000		192,000		304,000		247,000
Selling and administrative expenses		77,000		54,000		56,000		51,000
Income (loss) from operations		$ (29,000)		$ (51,000)		$138,000		$154,000

Analysis reveals the following percentages of variable costs in each division.

		I			II			III			IV
Cost of goods sold		73	%		92	%		77	%		79	%
Selling and administrative expenses		41			60			48			62

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 be discontinued.

Prepare a columnar condensed income statement for Brislin Company, assuming Division II is eliminated. Division IIs 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
		I		III		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		$		$		$		$