Question 5 of 5 8/10 E Sandhill Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $ 216,600 and the following divisional results. Division 1 Sales III IV $ 253,000 $195.000 $ 501.000 Cost of goods sold $ 447.000 197.000 195.000 296.000 250.000 Selling and administrative expenses 69,400 63.000 61,000 48.000 Income (loss) from operations $ ( 13.400) $(63,000) $ 144,000 $ 149,000 Analysis reveals the following percentages of variable costs in each division. 1 = IV = 20 Cost of goods sold 72 % 89 % 79 % 76 % Selling and administrative expenses 40 57 52 59 Discontinuance of any division would save 50% of the fixed costs and expenses for that division Question 5 of 5 Discontinuance of any division would save 50% of the fixed costs and expenses for that division. 8/10 = Top management is very concerned about the unprofitable divisions (I and II). Consensus is that one or both of the divisions should be discontinued. (a) Your answer is correct. Compute the contribution margin for Divisions land 11. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Division I Division II Contribution margin $ 83400 GA $ 14460 e Textbook and Media Assistance Used Attempts: 3 of 5 used 122 A 1 1 . Question 5 of 5 8/10 (b1) Your answer is correct. Prepare an incremental analysis concerning the possible discontinuance of Division 1. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses eg. (45).) Continue Eliminate Net Income Increase (Decrease) Contribution margin $ SA 83400 $ -83400 Fixed costs Cost of goods sold 55160 27580 i 27580 Selling and administrative 41640 20820 20820 Total fixed 96800 48400 i 48400 expenses Question 5 of 5 8/10 expenses 96800 48400 i 48400 Income (loss) from operations - 13400 $ -48400 $ -35000 eTextbook and Media Attempts: 1 of 5 used (52) Your answer is correct. Prepare an incremental analysis concerning the possible discontinuance of Division 1 (Enter negative amounts using either a negative sign preceding the number e.g.-45 or parentheses eg. (45).) Net Income Increase (Decrease) Continue Eliminate $ 14460 $ 14460 Contribution margin MIAM --- * 5C Mostly cloudy Question 5 of 5 Prepare an incremental analysis concerning the possible discontinuance of Division II. (Enter negative amounts using either a negative sign preceding the number eg.-45 or parentheses e.g. (45).) 8/10 5 Continue Eliminate Contribution margin Net Income Increase (Decrease) $ - 14460 $ $ Fixed costs 14460 Cost of goods sold 21450 10725 10725 Selling and administrative 27090 13545 i 13545 Total fixed expenses 48540 i 24270 24270 Income (loss) from operations $ 63000 $ 24270 $ 38730 e Textbook and Media Attempts: 2 of 5 used b 123 AM i * Question 5 of 5 8/10 E (b3) Your answer is correct. What course of action do you recommend for each division? Division 1 Continued Division II Eliminated V e Textbook and Media Attempts: 2 of 5 used (c) (c) 8/10 9 Prepare a columnar condensed income statement for Sandhill Company, assuming Division II is eliminated. Division II's unavoidable fixed costs are allocated equally to the continuing divisions. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) SANDHILL COMPANY CVP Income Statement For the Quarter Ended March 31, 2022 Divisions I M IV Sales $ $ Variable costs Cost of goods sold Selling and administrative Total variable costs Contribution margin 1:24 AM 2021-11-07 HNE :: O B. 5C Mostly cloudy ^OO ( ENG Questlon 5 of 5