Problem 7-5A a, b1-b3, c (Part Level Submission) (Video) Brislin Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $216,400 and the following divisional results. Sales Division II III $199,000 $499,000 189,000 297,000 54,000 56,000 $ (44,000) $146,000 $250,000 204,000 76,600 $ (30,600) Cost of goods sold Selling and administrative expenses IV $443,000 246,000 52,000 $145,000 Income (loss) from operations Analysis reveals the following percentages of variable costs in each division. Cost of goods sold Selling and administrative expenses I 71 % 37 II 91 % 61 III 81 % 4 9 IV 73 % 58 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. v (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 76818 76818 T -5930 Prepare an incremental analysis concerning the possible discontinuance of Division I. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Continue Eliminate Net Income Increase (Decrease) Contribution margin 76818 -76818 Fixed costs Cost of goods sold 59160 29580 29580 Selling and administrative T 48258 24129 24129 Total fixed expenses 107418 -53709 53709 Income (loss) from operations T -30600 -53709 -23109 Click if you would like to Show Work for this question: Open Show Work SHOW SOLUTION LINK TO TEXT VIDEO: SIMILAR PROBLEM By accessing this Question Assistance, you will learn while you earn points based on the Point Potential Policy set by your instructor Your answer is correct. Prepare an incremental analysis concerning the possible discontinuance of Division II. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Continue Eliminate Net Income Increase (Decrease) Contribution margin 5930 Fixed costs Cost of goods sold 17010 8505 8505 Selling and administrative 10530 10530 Total fixed expenses T T T 2106 38070 -44000 -19035 19035 Income (loss) from operations -19035 24965 Click if you would like to Show Work for this question: Open Show Work BRISLIN COMPANY CVP Income Statement For the Quarter Ended March 31, 2020 Divisions 1 IV Total III 499000 Sales T 1192000 Variable costs 1 Cost of goods sold 144840 179580 564990 Selling and administrative I 28342 27440 30160 T 85942 209740 LT 650932 Total variable costs T 173182 | 268010 T Contribution margin 76818 230990 233260 541068 Fixed costs Cost of goods sold Selling and administrative Total fixed costs Income (loss) from operations