Question 5 of 9 2/4 Ribeiro Manufacturing Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $ 145.000 and the following divisional results: Division 1 11 HI IV Sales $510,000 $390.000 $310,000 $ 180,000 Cost of goods sold 300,000 250,000 270,000 150,000 Selling and administrative expenses 60,000 80,000 65.000 70,000 Income foss) from operations 5.150.000 $ 60.000 $125.000) $140,000) The analysis reveals the following percentages of variable costs in each division 1 11 In IV 70% 90% Cost of goods sold Selling and administrative expenses 75% 90% 40 SO 65 70 Discontinuance of any division would save 50% of the fixed costs and expenses for that division . 8 0 T Y US P G K N . COM 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. (a) Moodle Wiley Plus Jupiter Question 5 of 9 2/4 = Division III: Income Increase (Decrease) Keep Div. 111 Shut Div. III Contribution margin $ 65250 $ 0 65250 Fixed costs 90250 45125 i 45125 Totals $ 25000 $ 45125 $ -20125 (2) Division IV Division IV: Income Increase Decrease) Keep Div. IV Shut Div. IV Contribution margin S 4000 4000 Fixed costs 36000 18000 18000 Totals 40000 18000 S 22000 a DO OS 4 5 6 7 8 9 Bacol 0 R MOO Wir Question 5 of 9 2/4 E HII 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 eg. 45 or parentheses es. (45) While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problemi) RIBEIROMANUFACTURING COMPANY CVP Income Statement Divi Div Il Div III $ S R Y US H