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  3. question 2 modern company has four divisions. the

Question 2 Modern Company has four divisions. The budgeted revenues and expenses for each division...

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Accounting

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Question 2 Modern Company has four divisions. The budgeted revenues and expenses for each division for 2021 follows: 1 Sales Cost of goods sold Selling & admin costs Operating income (loss) Division B $504,000 $948,000 5960,000 440,000 930,000 765,000 96,000 202,500 144,000 S(32,000) $(184,500) $51,000 D $1.240,000 925,000 210,000 S105,000 Further analysis of costs reveals the following percentages of variable costs in each division: A B D Cost of goods sold 90% 80% 90% 85% Selling & admin costs 50% 50% 60% Closing down any division would result in a savings of 40% of the fixed costs of that division. Required: 1. Calculate the increase or decrease in operating income if Modern Company closes division B using the below table: Item 2. What factors should the top management of Modern Company consider before making a decision. Good luck

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