View Policies Current Attempt in Progress Wildhorse Manufacturing Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $139,800 and the following divisional results: Division 11 III IV $504,000 $393,000 $313.400 $175,700 297,000 241,800 273,200 151.800 Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations 73,900 67,400 $139,600 74,400 66,800 $76,800 $126,600) $150,000) The analysis reveals the following percentages of variable costs in each division: III IV 70% 92% 74% 92% Cost of goods sold Selling and administrative expenses 39 50 65 70 Question 1 of 34 - / 15 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 II and IV. (Enter negative amounts using either a negative sign preceding the number es. 45 or parentheses es (45).) Division II Divisions IV Contribution margin $ Prepare an incremental analysis for the possible discontinuance of (1) division Illand (2) division IV. (Round answers to O decimal places, eg. 125. Enter all negative amounts using either a negative sign preceding the number 4.8.-45 or parentheses e.s. (45). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.) Start NA SECOND MIDTERM EXAM FALL 2021 02:55:57 Question 1 of 34 -/15 (1) Division II Division II: Keep Div.in Income Increase (Decrease) Shut Div. Ili Contribution margin Food costs Totals (2) Division IV Income Increase (Decrease Division IV Keep Div. IV Shut Div. IV Contribution mancin Fixed costs Total Question 1 of 34 C > - / 15 III What course of action do you recommend for each division? Division III should be Division IV should be Prepare a condensed income statement in columns for Wildhorse Manufacturing assuming division IV is eliminated. Use the CVP format. Division IV's unavoidable fixed costs are allocated equally to the continuing divisions. (Enter foss using either a negative sign preceding the number es. 45 or parenthesese.. (45). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.) WILDHORSEMANUFACTURING COMPANY CVP Income Statement Divi Dlv 11 Div II Question 1 of 34 > -/15 in Prepare a condensed income statement in columns for Wildhorse Manufacturing, assuming division IV is eliminated. Use the CVP format. Division IV's unavoidable fixed costs are allocated equally to the continuing divisions. (Enter loss using either a negative sign preceding the number e.3. -45 or parentheses e.g. (45). While alternate approaches are possible, irrelevant fixed costs should be included in both options when solving this problem.) WILDHORSEMANUFACTURING COMPANY CVP Income Statement Divi DIVII Div III $ Question 1 of 34 > - / 15 Divi Div II Div III $ Variable costs Contribution margin Fixed costs Sales Net income / (loss) $ . $ $ Reconcile the total income from operations of $139,800 with the total income from operations without division IV. Income from operations with Division IV $ Incremental income from eliminating Division IV $ Income from operations without Division IV $
