Solomon Manufacturing Co produces and sells specialized equipment used in the petroleum industry. The company is organized into three separate operating branches: Division A, which manufactures and sells heavy equipment; Division B, which manufactures and sells hand tools, and Division C, which makes and sells electric motors. Each division is housed in a separate manufacturing facility. Company headquarters is located in a separate building. In recent years, Division B has been operating at a net loss and is expected to continue to do so. Income statements for the three divisions for 2017 follow Division A $ 4,200,000 Division B $1,275,000 Division $ 4,300,000 (2,400,000) (610,000) 1.190,000 (900,000 (275, eee) 100,000 (2.600.000) (400,000) 1,220,000 Sales Less Cost of goods sold Unit-level manufacturing costs Rent on manufacturing facility Gross margin Less: Operating expenses Unit-level selling and admin. expenses Division-level fixed selling and admin. expenses Headquarters facility-level costs Net income (loss) (194,500) (350,000) (190,009) 455,500 (74, 125) (79,000) (190,000) (243, 125) (244,500) (324.000) (190,000) 461,500 $ $ Required 6-1. Based on the preceding information recommend whether to eliminate Division B. a-2. Prepare companywide income statements before and after eliminating Division B. b. During 2017, Division B produced and sold 25,000 units of hand tools. Calculate the contribution to profit if sales and production increase to 33,000 units in 2018? c. Suppose that Solomon could sublease Division B's manufacturing facility for $410,000. Assuming that Division B currently has a production and sales volume of 33.000 units, determine whether Solomon should accept the opportunity to sublease the facility or continue production at Division B. Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required Based on the preceding information, recommend whether to eliminate Division B. (Negative amounts should be indicated by a minus sign.) Contribution to profit (los) Should Division B be eliminated? 0-2. Prepare companywide income statements before and after eliminating DIVISION b. During 2017, Division B produced and sold 25,000 units of hand tools. Calculate the contribution to increase to 33,000 units in 2018? c. Suppose that Solomon could sublease Division B's manufacturing facility for $410,000. Assuming tha production and sales volume of 33.000 units, determine whether Solomon should accept the opport or continue production at Division B. Complete this question by entering your answers in the tabs below. Required Al Required A2 Required B Required C Prepare companywide income statements before and after eliminating Division B. Company wide Income Statements Keep Division B Eliminate Division B Sales Less: Cost of goods sold Unit-level manufacturing costs Rent on manufacturing facility Gross margin Less: Operating expenses Unit-level selling and admin. expenses Division-level fixed selling and admin expenses Headquarters facility-level costs Net income (loss) Net income (loss) Required a-1. Based on the preceding information, recommend whether to eliminate Division B. a-2. Prepare companywide income statements before and after eliminating Division B. b. During 2017, Division B produced and sold 25,000 units of hand tools. Calculate the contribution to increase to 33,000 units in 2018? C. Suppose that Solomon could sublease Division B's manufacturing facility for $410,000. Assuming th production and sales volume of 33,000 units, determine whether Solomon should accept the opport or continue production at Division B. Complete this question by entering your answers in the tabs below. Required A1 Required A2 Required B Required During 2017, Division B produced and sold 25,000 units of hand tools. Calculate the contribution to profit if sal production increase to 33,000 units in 2018? (Do not round intermediate calculations.) Contribution to profit (loss) Should Division B be eliminated? (244 (324 (194,00) (350,000) (190,000) 455,500 Unilever Selang du aum. expenses Division-level fixed selling and admin. expenses Headquarters facility-level costs Net income (loss) 1/4, 122) (79,000) (190,000 $ (243,125) (190 461 $ Required -1. Based on the preceding information, recommend whether to eliminate Division B. a-2. Prepare companywide income statements before and after eliminating Division B. b. During 2017, Division B produced and sold 25,000 units of hand tools. Calculate the contribution to pro increase to 33,000 units in 2018? c. Suppose that Solomon could sublease Division B's manufacturing facility for $410,000. Assuming that production and sales volume of 33,000 units, determine whether Solomon should accept the opportur or continue production at Division B. Complete this question by entering your answers in the tabs below. Required Al Required A2 Required B Required Suppose that Solomon could sublease Division B's manufacturing facility for $410,000, at a production and sales 33,000 units. Calculate the contribution to profit of Division B. (Negative amounts should be indicated by a minus Contribution to profit (loss) Should Division B be eliminated?
