Solve for Required B and Required C
Division A $ 4,100,000 Division B $1,100,000 Division C $4,600,000 (2,400,000) (610,000) 1,090,000 (760,000) (275,000 65,000 (2,680,000) (800,000) 1,120,000 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) (193,500) (350,000) (190,000) 356,500 (42,700) (77,000) (190,000) $ (244,700) (243,500) (322,000) (190,000) 364,500 $ $ 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 20,000 units of hand tools. Calculate the contribution to profit if sales and production increase to 31,000 units in 2018? c. Suppose that Solomon could sublease Division B's manufacturing facility for $420,000. Assuming that Division B currently has a production and sales volume of 31,000 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 C Based on the preceding information, recommend whether to eliminate Division B. (Negative amounts should be indicated by a minus sign.) (54,700) Contribution to profit (loss) Should Division B be eliminated? $ Yes Required A1 Required A2 Required B Required C Prepare companywide income statements before and after eliminating Division B. Companywide Income Statements Keep Division B | $ 9,800,000 Eliminate Division B $ 8,700,000 (5,840,000) (5,080,000) (1,685,000) (1,410,000) $ 2,275,000 $2,210,000 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) (479,700)| (749,000)| (570,000)| 476,300 (437,000) (672,000) (570,000) 531,000 $ $ 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 20,000 units of hand tools. Calculate the contribution to profit if sales and production increase to 31,000 units in 2018? c. Suppose that Solomon could sublease Division B's manufacturing facility for $420,000. Assuming that Division B currently has a production and sales volume of 31,000 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 C Suppose that Rundle could sublease Division B's manufacturing facility for $420,000, at a production and sales volume of 31,000 units. Calculate the contribution to profit of Division B. (Negative amounts should be indicated by a minus sign.) Contribution to profit (loss) Should Division B be eliminated? Yes Required B Required )
