*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. Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations $249,000 199,000 76,000 $ (26,000) Division II TITIV $200,000 $504,000 $450,000 191,000 296,000 249,000 63,000 64,000 50,000 $ (54,000) $144,000 $151,000 Analysis reveals the following percentages of variable costs in each division. Cost of goods sold Selling and administrative expenses I II 74 % 88 % 396 0 III 79 % 5 1 IV 74 % 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).) Contribution margin Division 1 522100 Division II 57-5880 Attempts: 1 of 15 used *(61) Prepare an incremental analysis concerning the possible discontinuance of Division I. (Round answers to o 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