Sunland Manufacturing Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $167,600 and the following divisional results:

		Division
		I		II		III		IV
Sales		$518,800		$394,800		$311,400		$176,100
Cost of goods sold		290,100		245,900		272,800		153,000
Selling and administrative expenses		60,500		73,000		66,400		71,800
Income (loss) from operations		$168,200		$75,900		$(27,800)		$(48,700)

The analysis reveals the following percentages of variable costs in each division:

		I			II			III			IV
Cost of goods sold		72%			89%			74%			92%
Selling and administrative expenses		40			52			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.

Calculate the contribution margin for divisions III and IV. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

		Divisions III		Divisions IV
Contribution margin		$enter a dollar amount		$enter a dollar amount

Prepare an incremental analysis for the possible discontinuance of (1) division III and (2) division IV. (Round answers to 0 decimal places, e.g. 125. Enter all negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.) (1) Division III

Division III:		Keep Div. III			Shut Div. III			Income Increase (Decrease)
Contribution margin		$enter a dollar amount			$enter a dollar amount			$enter a dollar amount
Fixed costs		enter a dollar amount			enter a dollar amount			enter a dollar amount
Totals		$enter a total amount			$enter a total amount			$enter a total amount

(2) Division IV

Division IV:		Keep Div. IV			Shut Div. IV			Income Increase (Decrease)
Contribution margin		$enter a dollar amount			$enter a dollar amount			$enter a dollar amount
Fixed costs		enter a dollar amount			enter a dollar amount			enter a dollar amount
Totals		$enter a total amount			$enter a total amount			$enter a total amount

What course of action do you recommend for each division?

Division III should be select an option continuedeliminated.

Division IV should be select an option eliminatedcontinued.

Prepare a condensed income statement in columns for Sunland Manufacturing, assuming division IV is eliminated. Use the CVP format. Division IVs unavoidable fixed costs are allocated equally to the continuing divisions. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.)

SUNLANDMANUFACTURING COMPANY CVP Income Statement choose the accounting period March 31, 2022For the Quarter Ended March 31, 2022For the Year Ended March 31, 2022
		Div I		Div II		Div III		Total
select an income statement item Fixed costsVariable costsSalesContribution marginNet income / (loss)		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount		$enter a dollar amount
select an income statement item Fixed costsVariable costsNet income / (loss)SalesContribution margin		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a summarizing line for the first part Contribution marginSalesFixed costsVariable costsNet income / (loss)		enter a total amount for the first part		enter a total amount for the first part		enter a total amount for the first part		enter a total amount for the first part
select an income statement item Contribution marginVariable costsFixed costsNet income / (loss)Sales		enter a dollar amount		enter a dollar amount		enter a dollar amount		enter a dollar amount
select a closing name for this statement Net income / (loss)Contribution marginVariable costsFixed costsSales		$enter a total net income or loss amount		$enter a total net income or loss amount		$enter a total net income or loss amount		$enter a total net income or loss amount

Reconcile the total income from operations of $167,600 with the total income from operations without division IV.

Income from operations with Division IV		$enter a dollar amount
Incremental income from eliminating Division IV		$enter a dollar amount
Income from operations without Division IV		$enter a total amount