Question 4 of 4 11.2 / 14 View Policies Show Attempt History Current Attempt in Progress Pharoah Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $207,000 and the following divisional results Division 1 Il TIT IV Sales $247.000 $198,000 $501000 $448.000 Cost of goods sold 200,000 189,000 298,000 254.000 Selling and administrative expenses 75,000 63,000 63000 45,000 Income (loss) from operations $(28,000) $(54,000) $140.000 $149.000 Analysis reveals the following percentages of variable costs in each division I 11 IV Cost of goods sold 67 96 88 % 81 % 78 % Selling and administrative expenses 38 57 50 57 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 and II). Consensus is that one or both of the divisions should be discontinued. ka) Your answer is correct Compute the contribution margin for Divisions. I and Inter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (451) Division Division 11 Contribution margin $ 34500 $ 4230 Jestion 4 of 4 11.2 / 14 II (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 eg.-45 or parentheses eg. (45).) Division Division 11 Contribution margin $ 84500 $ -4230 e Textbook and Media Attempts. 1 of 5 used (51) Your answer is correct Prepare an incremental analysis concerning the possible discontinuance of Division 1 (Enter negative amounts using either a negative sign preceding the number ez.-45 or parentheses eg.(45).) Continue Eliminate Net Income Increase (Decrease) Contribution margin si 84500 b $ 84500 Fixed costs Cost of goods sold -66000 1 33000 4 33000 Selling and administrative 11465001 20250 i 23250 Total fixed expenses 115500 1 50250 1 56250 Income (loss) from operations 5 28000 +56250 -28250 estion 4 of 4 11.2/14 e Textbook and Media Attempts: 1 of 5 used (b2) Your answer is correct Prepare an incremental analysis concerning the possible discontinuance of Division II (Enter negative amounts using elther a negative sign preceding the number eg.-45 or parentheses eg. (45).) 6 Continue Eliminate Net Income Increase (Decrease) Contribution margin -4230 $ 0 $ 4230 Fixed costs Cost of goods sold -22680 i +11340 11340 Selling and administrative -27090 1 13545 i 13545 Total fixed expenses -49770 1 -24885 24885 Income (loss) from operations $ 54000 +24885 $ 29115 e Textbook and Media Attempts. 1 of 5 used (63) ) Your answer is correct What course of action do you recommend for each division? Division 1 Continued Jestion 4 of 4 11.2 / 14 MI! (63) Your answer is correct What course of action do you recommend for each division? Division 1 Continued V Division 11 Eliminated e Textbook and Media Attempts: 2 of 5 used (c) Prepare a columnar condensed income statement for Pharoah Company, assuming Division II is eliminated. Division II's unavoidable fixed costs are allocated equally to the continuing divisions. (Enter negative amounts using either a negative sign preceding the number eg. 45 or parentheses eg. (45).) PHAROAH COMPANY CVP Income Statement For the Quarter Ended March 31, 2022 Divisions IN IV Sales 5 254 Variable costs Cost of goods sold 200.000 298,000 254 Selling and administrative 75,000 63,000 45, Total variable costs Contribution margin Fixed costs Question 4 of 4 11.27 14 (c) Prepare a columnar condensed income statement for Pharoah Company, assuming Division II is eliminated. Division Il's unavoidable fixed costs are allocated equally to the continuing divisions. (Enter negative amounts using elther a negative sign preceding the number eg.-45 or parentheses eg. (45).) PHAROAH COMPANY CVP Income Statement For the Quarter Ended March 31, 2022 Divisions !!! IV Sales $ 254 Variable costs Cost of goods sold 200.00 298.000 254 Selling and administrative 75.000 63.000 45. Total variable costs Contribution margin Fixed costs Cost of goods sold Selling and administrative Total fixed costs Income (loss) from operations $ e Textbook and Media Save for Later Attempts:0 of 5 used Submit