Thornton 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 year 2 follow. Division A Division B Division C Sales $ 4,200,000 $ 1,248,000 $ 4,300,000 Less: Cost of goods sold Unit-level manufacturing costs (2,600,000 ) (888,000 ) (2,880,000 ) Rent on manufacturing facility (410,000 ) (285,000 ) (400,000 ) Gross margin 1,190,000 75,000 1,020,000 Less: Operating expenses Unit-level selling and administrative expenses (195,500 ) (56,280 ) (245,500 ) Division-level fixed selling and administrative expenses (370,000 ) (81,000 ) (326,000 ) Headquarters facility-level costs (190,000 ) (190,000 ) (190,000 ) Net income (loss) $ 434,500 $ (252,280 ) $ 258,500 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 year 2, Division B produced and sold 24,000 units of hand tools. Calculate the contribution to profit if sales and production increase to 35,000 units in year 3. c. Suppose that Thornton could sublease Division Bs manufacturing facility for $410,000, at a production and sales volume of 35,000 units. Calculate the contribution to profit of Division B.

Complete this question by entering your answers in the tabs below. Based on the preceding information, recommend whether to eliminate Division B. (Negative amounts should be indicated by a minus sign.) Complete this question by entering your answers in the tabs below. Prepare companywide income statements before and after eliminating Division B. Complete this question by entering your answers in the tabs below. 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 35,000 units in year 3. (Negative amounts should be indicated by a minus sign. Do not round intermediate calculations.) Complete this question by entering your answers in the tabs below. Suppose that Thornton could sublease Division B's manufacturing facility for $410,000, at a production and sales volume of 35,000 units. Calculate the contribution to profit of Division B. (Negative amounts should be indicated by a minus sign.)