Problem 21-5A (Part Level Submission) Brislin Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $213,000 and the following divisional results. I $250,000 200,000 75,000 $ (25,000) Division II III $200,000 $500,000 192,000 300,000 60,000 60,000 $ (52,000) $140,000 Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations Analysis reveals the following percentages of variable costs in each division. II 90 % III 80% 60 50 IV $450,000 250,000 50,000 $150,000 IV 75% 60 I Cost of goods sold 70 % Selling and administrative expenses 40 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.
Problem 21-5A (Part Level Submission) Brislin Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $213,000 and the following divisional results. I $250,000 200,000 75,000 $ (25,000) Division II III $200,000 $500,000 192,000 300,000 60,000 60,000 $ (52,000) $140,000 Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations Analysis reveals the following percentages of variable costs in each division. II 90 % III 80% 60 50 IV $450,000 250,000 50,000 $150,000 IV 75% 60 I Cost of goods sold 70 % Selling and administrative expenses 40 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.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:▼(b2)
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).)
Contribution margin
Fixed costs
Cost of goods sold
Selling and administrative
Total fixed expenses
Income (loss) from operations
$
Continue
Eliminate
Net Income
Increase (Decrease)
$
Attempts: 0 of 5 used
SAVE FOR LATER
SUBMIT ANSWER

Transcribed Image Text:Problem 21-5A (Part Level Submission)
Brislin Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $213,000 and the following
divisional results.
Division
I
III
II
$200,000 $500,000
Sales
$250,000
Cost of goods sold
200,000
192,000 300,000
60,000 60,000
Selling and administrative expenses
75,000
Income (loss) from operations
$ (25,000) $ (52,000) $140,000
Analysis reveals the following percentages of variable costs in each division.
II
90 %
III
80%
60
50
I
Cost of goods sold
70%
Selling and administrative expenses 40
IV
75%
60
IV
$450,000
250,000
50,000
$150,000
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.
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