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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

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

I II III IV

Sales $504,000 $393,000 $313,400 $175,700

Cost of goods sold 297,000 241,800 273,200 151,800

Selling and administrative expenses 67,400 74,400 66,800 73,900

Income (loss) from operations $139,600 $76,800 $(26,600) $(50,000)

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

I II III IV

Cost of goods sold 70% 92% 74% 92%

Selling and administrative expenses 39 50 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.

(a)

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

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