*Problem 20-5A (Part Level Submission) Brislin Company has four operating divisi

Question

*Problem 20-5A (Part Level Submission) Brislin Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $210,200 and the following divisional results DIVISIon IV Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations $254,000 $197,000 $499,000 $451,000 193,000 302,000 246,000 55,000 $ (12,800) $(59,000) $132,000 $150,000 197,000 69,800 63,000 65,000 Analysis reveals the following percentages of variable costs in each division IV 77 % 60 Cost of goods sold 67 % 90 % 82 % Selling and administrative expenses 41 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 62 51 Your answer is correct 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).) Division I Division II contribution margin 193393 ?15760) Attempts: 3 of 3 used *(b1) Prepare an incremental analysis concerning the possible discontinuance of Division I. (Round answers to 0 decimal places, e.g. 1525. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Net Income Increase (Decrease) Continue Eliminate Contribution margin Fixed costs Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations

Explanation / Answer

Continue Eliminate Net income increase(decrease) Contribution margin 93392 0 -93392 Fixed costs: Cost of goods sold 65010 32505 32505 Selling and administrative 41182 20591 20591 Total fixed expenses 106192 53096 53096 Income(loss) from operations -12800 -53096 -40296

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