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Ribeiro Manufacturing Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $214,600 and the following

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Ribeiro Manufacturing Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $214,600 and the following divisional results: Division I II III IV Sales $529,900 $410,400 $308,700 $176,100 Cost of goods sold 289,100 240,900 266,600 153,000 Selling and administrative expenses 57,600 70,400 60,600 72,300 Income (loss) from operations $183,200 $99,100 $(18,500) $(49,200) The analysis reveals the following percentages of variable costs in each division: I II III IV Cost of goods sold 72% 92% 75% 92% Selling and administrative expenses 42 48 65 70 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

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