Question: Ivanhoe Company has four operating divisions. During the first quarter of 2025, the company reported aggregate income from operations of $226,400 and the following divisional results. Division IIIIIIIVSales $248,000$198,000$505,000$450,000Cost of goods sold Ivanhoe Company has four operating divisions. During the first quarter of 2025, the company reported aggregate income from operations of $216,400 and the following divisional results. Division I II III IV Sales $250,000 $199,000 $499,000 $443,000 Cost of goods sold 204,000 189,000 297,000 246,000 Selling and administrative expenses 76,600 54,000 56,000 52,000 Income (loss) from operations $(30,600) $(44,000) $146,000 $145,000 Analysis reveals the following percentages of variable cost in each division. Division I II III IV Cost of goods sold 71% 91% 81% 73% Selling and administrative expenses 37 61 49 58 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. Division I II Contribution Margin

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter25: Departmental Accounting

Section: Chapter Questions

Problem 1CE

See similar textbooks

Question: Ivanhoe Company has four operating divisions. During the first quarter of 2025, the company reported aggregate income from operations of $226,400 and the following divisional results. Division IIIIIIIVSales $248,000$198,000$505,000$450,000Cost of goods sold

Ivanhoe Company has four operating divisions. During the first quarter of 2025, the company reported aggregate income from operations of $216,400 and the following divisional results.

Division
	I	II	III	IV
Sales	$250,000	$199,000	$499,000	$443,000
Cost of goods sold	204,000	189,000	297,000	246,000
Selling and administrative expenses	76,600	54,000	56,000	52,000
Income (loss) from operations	$(30,600)	$(44,000)	$146,000	$145,000