Required:

a$-1.$ Based on the preceding information, recommend whether to eliminate Division B$.$

a$-2.$ Prepare company$-$wide income statements before and after eliminating Division B$.$

b$.$ During Year $2,$ Division B produced and sold $24,000$ units of hand tools. Calculate the contribution to profit if sales and production increase to $36,000$ units in Year $3.$ Should Division B be eliminated?

c$.$ Suppose that Munoz could sublease Division B$$s manufacturing facility for $$425,000$ or operate Division B at a production and sales volume of $36,000$ units. Determine Division B$\text{'}$s contribution margin at that level. Based on your determination, would you operate Division B or close it$?$