Question

Chapter 7 Homework 0.2/2 E Question 8 of 8 Brislin Company has four operating divisions. During the first quarter of 2020, the company reported aggregate income from operations of $207,000 and the following divisional results Division 11 III IV Sales $247,000 $198.000 $501,000 $448,000 Cost of goods sold 200,000 189,000 298,000 254,000 Selling and administrative expenses 63,000 63,000 45,000 75,000 $(28,000) $(54,000) $140,000 Income (loss) from operations $149,000 Analysis reveals the following percentages of variable costs in each division. 1 11 ||| IV Cost of goods sold 67 % 88 % 81 % 78 % Selling and administrative expenses 38 57 50 57 Discontinuance of any division would save 50% of the fixed costs and expenses for that division. 1 0.2/2 Your answer is partially correct. Compute the contribution margin for Divisions I and II. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Division! Division II Contribution margin. $ 84500 eTextbook and Media Save for Later Attempts: 1 of 3 used Submit Answer (61) The parts of this question must be completed in order. This part will be available when you complete the part above. Question 8 of 8 (a)

Answer 1

Given the details:Sales$247,000$198.000$501,000$448,000Cost of goods sold200,000189,000298,000254,000Selling and administrative expenses63,00063,00045,00075,000$(28,000)$(54,000)$140,000 Income (loss) from operations$149,000 Variable costs percentage:1 111|||IV Cost of goods sold 67 %88 %81 %78 %Selling and administrative expenses 385750 Discontinuance of any division would save 50% of the fixed costs and expenses for that division. Compute the contribution margin for Divisions I and II.The formula for calculating the contribution margin is given below:Contribution Margin = Sales - Variable costsFor Division 1:Contribution margin = $247,000 - (67% * $200,000) - (38% * $63,000)Contribution margin = $247,000 - $134,000 - $23,940Contribution margin = $89,060For Division 2:Contribution margin = $198,000 - (88% * $189,000) - (57% * $63,000)Contribution margin = $198,000 - $166,320 - $35,910Contribution margin = ($4,230)Negative amounts are represented by parentheses.Contribution margin of Division 1 is $89,060 and the contribution margin of Division 2 is ($4,230).