Problem 12-5 Founder Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $212,300 and the following divisional results. Division 1 11 TIL TV Sales 5247,000 $190,000 $499,000 $448,000 Cost of goods sold 203,000 193,000 295,000 250,000 Selling and administrative expenses 69,700 56,000 65,000 48,000 Income (108) from operations $ (25,700) 5 (51,000) $139,000 $150,000 Analysis reveals the following percentages of variable costs in each division 1 11 III TV Cost of goods sold 71% 88% 9176 Selling and administrative expenses 38 59 50 60 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 (and I). Consensus is that one or both of the divisions should be discontinued. 3 Your answer inco Try again Compute the contribution margin for Division I and II. (Enter negative amounts ning either a negative sin preceding the number 45 or parentheses (45) Division 1 Division 11 Contribution margin 76346 (4590) LINK TO TEXT your answer is partially correct. Try again. Prepare an incremental analysis concerning the possible discontinuance of Division (Round answers to decimal places. 1525. If amount decreases net income then enter the amount using the a negative sin preceding the number of parentheses (45).) Net Income Continue Eliminate Increase (Decrease) Contribution margin 76346 -76346 Fixed costs Prepare an incremental analye concerning the possible discontince of Division 1. (Round newers to decimal places, e.g. 1525. If amount decreases net income then enter the amount ning aither negative sin preceding the number og 45 or parenthesese..(45).) Net Income Continue Eliminate Increase (Decrease) Contribution margin 76346 Tixed costs Cost of goods sols 58870 2005 29435 Selling and administrative 4320 21630 21638 Total Fixed expenses 10214 51023 510 Income loss) from operations -2500 -51073 25273 LINK TO THEY El your answer a partially correct. We Prepare an incremental analysis concerning the possible discontinuance of Division 1 (Round answers to decimal places.. 253. It amount decreases net income theater the amount either a negative in preceding the number 45 ar parentheses (48)) Net Income Continue Eliminate Increase (ecret Cubon margin 4900 490 costs Cost of yod old 2016 11130 11930 Saling and strative 23370 Total de pense 21.09 Shame on from operations 51000 Your answer is partially correct. Try again. Prepare a columnar condensed Income statement for Flounder Company, assuming Division 1 is eliminated. Division II's unavoidable fixed costs are allocated equally to the continuing divisions (ar amount decreases net income then enter the amount using either a negative in preceding the number .. or parenthesese.. (45).) FLOUNDER COMPANY CVP Income Statement For the quarter Ended March 31, 2017 Divisione 111 TV Total Sales 247000 499000 448000 1194000 Variable costs Cost of goods sold E B 190000 238950 573000 144130 . 26524 Selling and administrative 32500 28800 87824 0 Total variable costs 170654 271450 236000 26 Contribution margin Fixed cost Cost of goods sold Selling and administrative Total fixed costs Income (loss) from operations LINK TO TEXT
