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Blossom Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $207,400 and the following divisional results. Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations Analysis reveals the following percentages of variable costs in each division. Cost of goods sold 68 % Selling and administrative expenses 40 (b2) Cost of goods sold Selling and administrative expenses 40 Contribution margin I $249.000 $200,000 $498,000 205,000 192,000 305,000 71.600 60,000 59,000 $(27,600) $(52,000) $134,000 Fixed costs I Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations I $ 11 68 % 88 % 59 Analysis reveals the following percentages of variable costs in each division. 11 11 Division Continue 88 % 59 III 81 % 47 III 81 % 47 III IV 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. 74 % $ 59 Prepare an incremental analysis concerning the possible discontinuance of Division II. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) IV 74 % 59 IV $446,000 248,000 45,000 $153,000 Eliminate Net Income Increase (Decrease)

Blossom Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $207,400 and the following divisional results. Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations Analysis reveals the following percentages of variable costs in each division. Cost of goods sold 68 % Selling and administrative expenses 40 (b2) Cost of goods sold Selling and administrative expenses 40 Contribution margin I $249.000 $200,000 $498,000 205,000 192,000 305,000 71.600 60,000 59,000 $(27,600) $(52,000) $134,000 Fixed costs I Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations I $ 11 68 % 88 % 59 Analysis reveals the following percentages of variable costs in each division. 11 11 Division Continue 88 % 59 III 81 % 47 III 81 % 47 III IV 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. 74 % $ 59 Prepare an incremental analysis concerning the possible discontinuance of Division II. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) IV 74 % 59 IV $446,000 248,000 45,000 $153,000 Eliminate Net Income Increase (Decrease)

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A 191.need answer with explanation

Blossom Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $207,400 and the following divisional results. Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations Analysis reveals the following percentages of variable costs in each division. Cost of goods sold 68 % Selling and administrative expenses 40 (b2) Cost of goods sold Selling and administrative expenses 40 Contribution margin I $249.000 $200,000 $498,000 205,000 192,000 305,000 71.600 60,000 59,000 $(27,600) $(52,000) $134,000 Fixed costs I Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations I $ 11 68 % 88 % 59 Analysis reveals the following percentages of variable costs in each division. 11 11 Division Continue 88 % 59 III 81 % 47 III 81 % 47 III IV 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. 74 % $ 59 Prepare an incremental analysis concerning the possible discontinuance of Division II. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) IV 74 % 59 IV $446,000 248,000 45,000 $153,000 Eliminate Net Income Increase (Decrease)
Transcribed Image Text:Blossom Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $207,400 and the following divisional results. Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations Analysis reveals the following percentages of variable costs in each division. Cost of goods sold 68 % Selling and administrative expenses 40 (b2) Cost of goods sold Selling and administrative expenses 40 Contribution margin I $249.000 $200,000 $498,000 205,000 192,000 305,000 71.600 60,000 59,000 $(27,600) $(52,000) $134,000 Fixed costs I Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations I $ 11 68 % 88 % 59 Analysis reveals the following percentages of variable costs in each division. 11 11 Division Continue 88 % 59 III 81 % 47 III 81 % 47 III IV 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. 74 % $ 59 Prepare an incremental analysis concerning the possible discontinuance of Division II. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) IV 74 % 59 IV $446,000 248,000 45,000 $153,000 Eliminate Net Income Increase (Decrease)
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