Problem 7-5 (Part Level Submission) Swifty Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $215,000 and the following divisional results. Division II IV $450,000 Sales $249,000 $200,000 $504,000 Cost of goods sold 199,000 191,000 296,000 249,000 Selling and administrative expenses 76,000 63,000 64,000 50,000 $144,000 $151,000 Income (loss) from operations (26,000) (54,000) Analysis reveals the following percentages of variable costs in each division I II IV Cost of goods sold 74 % 88 % 79 % 74 % Selling and administrative expenses 39 60 51 61 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 "(a) Your answer is correct. Compute the contribution margin for Divisions I and II. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Division I Division II Contribution margin s72100 S 5880 Attempts: 1 of 15 used Your answer is correct Prepare an incremental analysis concerning the possible discontinuance of Division I. (Round answers to 0 decimal places, e.g. 1525. If amount decreases net income then enter the amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase (Decrease) Continue Eliminate $22100 $E72100 Contribution margin Fixed costs Cost of goods sold 151740 125870 125870 Selling and administrative T46360 123180 123180] Total fixed expenses 198100 49050 49050 F26000 F49050 $E23050 Income (loss) from operations Attempts: 2 of 15 used *(b2) Prepare an incremental analysis concerning the possible discontinuance of Division II. (Round answers to 0 decimal places, e.g. 1525. If amount decreases net income then enter the amount using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase (Decrease) Continue Eliminate Contribution margin Fixed costs Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations Attempts: 0 of 15 used