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 $171,800 and the following divisional results:

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 $171,800 and the following divisional results: Division I II III IV Sales $524,100 $392,500 $314,200 $179,900 Cost of goods sold 299,600 248,400 271,600 153,600 Selling and administrative expenses 51,500 73,500 68,600 72,100 Income (loss) from operations $173,000 $70,600 $(26,000) $(45,800) The analysis reveals the following percentages of variable costs in each division: Cost of goods sold Selling and administrative expenses I 72% 40 II 90% 4 9 III 75% 65 IV 90% 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 III and IV. (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses e.g. (45).) Divisions III Divisions IV Contribution margine 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 e.g. -45 or parentheses e.g. (45).) (1) Division III Income Increase (Decrease) Division III: Keep Div. III Shut Div. III Contribution margin Fixed costs Totals (2) Division IV Income Increase (Decrease) Division IV: Keep Div. IV Shut Div. IV Contribution margins Fixed costs Totals 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.g. (45).) RIBEIRO MANUFACTURING COMPANY CVP Income Statement Div I Div II Div III Total Reconcile the total income from operations of $171,800 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