Brislin Company has four operating divisions. During the first quarter of 2017,

Question

Brislin 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. Analysis reveals the following percentages of variable costs in each division. 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 (I and II). Consensus is that one or both of the divisions should be discontinued. Compute the contribution margin for Divisions I and II. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Explanation / Answer

Contribution Margin Statement Division I Division II Sales 2,47,000 1,98,000 Less:Variable cost of goodssold 1,44,130 1,74,240 Gross contibution Margin 1,02,870 23,760 Less: Variable Selling& Distribution expenses 26,486 33,040 Contibution Margin 76,384 (9280) Less:Fixed Expenses 1,02,084 41,720 Net Profit/loss (25,700) (51,000)

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