Question

B) 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).)

Brislin Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $181,600 and the following divisional results. Division IV Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations $250,000 $198,000 $499,000 $443,000 200,000 195,000 305,000 255,000 55,000 $ (20,400) $(60,000) $129,000 $133,000 70,400 63,000 65,000 Analysis reveals the following percentages of variable costs in each division Cost of goods sold Selling and administrative expenses Il I IV 88 % 81% 57 66 % 76 % 38 52 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). Consensus is that one or both of the divisions should be discontinued Compute the contribution margin for Divisions I and i I·Enter negative amounts using either a negative sign preceding the numbereg.-45 or parentheses eg. (45).) Division I Division II Contribution margin $

C)Prepare an incremental analysis concerning the possible discontinuance of Division II. (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).)

D) Prepare a columnar condensed income statement for Brislin Company, assuming Division II is eliminated. Division II’s unavoidable fixed costs are allocated equally to the continuing divisions. (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).)

Answer 1

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