Problem 7.40A a-d Ribeiro Manufacturing Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $160,400 and the following divisional results Division I II III IV Sales $506,400 $409,200 $311,700 $178,000 Cost of goods sold 298,600 243,800 268,000 152,400 Selling and administrative expenses 66,600 79,100 63,400 73,000 Income (loss) from operations $141,200 $86,300 $(19,700)5(47.400) The analysis reveals the following percentages of variable costs in each division: 111 TV Cost of goods sold Selling and administrative expenses 70% 41 88% 49 74% 65 91% 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 (Ill and IV). The consensus is that the company should discontinue one or both of these divisions calculate the contribution margin for divisions Ill and IV (Enter negative amounts using either a negative sign preceding the number .g.-45 or parentheses .. (45).) Divisions III Divisions IV Contribution margin $ decimal places, e.. 125. Enter a negative amounts Prepare an incremental analysis for the possible discontinuance of (1) division II and (2) division IV. (Round answers to using either a negative sign preceding the number .g.-45 or parentheses e.g. (45)-) (1) Division IT Income Increase (Decrease) Division III: Keep Div. III Shut Div. III Contribution margin $ Fixed costs Totals Prepare an incremental analysis for the possible discontinuance of (1 vision and (2) division IV. (Round answers to using either a negative sign preceding the number e.g. 45 or parentheses e.g. (45).) decimal places... 125. Eater all negative (1) Division III Income Increase (Decrease) Keep Div. III Shut Div. III Division III: Contribution margin Fixed costs Totals (2) Division IV Income Increase (Decrease) Division IV: Keep Div. IV Shut Div. 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 Ribeiro Manufacturing, assuming division IV is eliminated. Use the CVP format. Division is unavoidable freedom equally to the continuing divisions. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) RIBEIRO MANUFACTURING COMPANY CVP Income Statement Division I should be Division IV should be Prepare a condensed income statement in columns for Ribeiro 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... (45).) RIBEIRO MANUFACTURING COMPANY CVP Income Statement Div 1 Div II Div III Total Reconcile the total income from operations of $160,400 with the total income from operations without division IV. Income from operations with Division IV Incremental income from eliminating Division IVS Income from operations without Division IV SAVE FOR LATER SUBMIT ANSW Question Attempts: 1 of 2 used for each division? Fixed costs Variable costs Sales able fed costs Net income / (loss) in columns for Ribeiro Manufacturing, assuming division IV is eliminated. Use the CVP format. Division IV' er loss using either a negative sign preceding the number e.g.-45 or parentheses e.(45)) Contribution margin LO MANUFACTURING COMPANY CVP Income Statement Div II Div Reconcile the total income from operations of $160,400 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 SAVE FOR LATER Question Attempts: 1 of 2 used