Blossom Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $207,400 and the following divisional results. Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations Analysis reveals the following percentages of variable costs in each division. Cost of goods sold 68 % Selling and administrative expenses 40 (b2) Cost of goods sold Selling and administrative expenses 40 Contribution margin I $249.000 $200,000 $498,000 205,000 192,000 305,000 71.600 60,000 59,000 $(27,600) $(52,000) $134,000 Fixed costs I Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations I $ 11 68 % 88 % 59 Analysis reveals the following percentages of variable costs in each division. 11 11 Division Continue 88 % 59 III 81 % 47 III 81 % 47 III IV 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. 74 % $ 59 Prepare an incremental analysis concerning the possible discontinuance of Division II. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) IV 74 % 59 IV $446,000 248,000 45,000 $153,000 Eliminate Net Income Increase (Decrease)
Blossom Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $207,400 and the following divisional results. Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations Analysis reveals the following percentages of variable costs in each division. Cost of goods sold 68 % Selling and administrative expenses 40 (b2) Cost of goods sold Selling and administrative expenses 40 Contribution margin I $249.000 $200,000 $498,000 205,000 192,000 305,000 71.600 60,000 59,000 $(27,600) $(52,000) $134,000 Fixed costs I Cost of goods sold Selling and administrative Total fixed expenses Income (loss) from operations I $ 11 68 % 88 % 59 Analysis reveals the following percentages of variable costs in each division. 11 11 Division Continue 88 % 59 III 81 % 47 III 81 % 47 III IV 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. 74 % $ 59 Prepare an incremental analysis concerning the possible discontinuance of Division II. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) IV 74 % 59 IV $446,000 248,000 45,000 $153,000 Eliminate Net Income Increase (Decrease)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter2: Basic Cost Management Concepts
Section: Chapter Questions
Problem 25E: Last year, Orsen Company produced 25,000 juicers and sold 26,500 juicers for 60 each. The actual...
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A 191.need answer with explanation
Transcribed Image Text:Blossom Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from
operations of $207,400 and the following divisional results.
Sales
Cost of goods sold
Selling and administrative expenses
Income (loss) from operations
Analysis reveals the following percentages of variable costs in each division.
Cost of goods sold
68 %
Selling and administrative expenses 40
(b2)
Cost of goods sold
Selling and administrative expenses 40
Contribution margin
I
$249.000
$200,000 $498,000
205,000
192,000
305,000
71.600
60,000
59,000
$(27,600) $(52,000) $134,000
Fixed costs
I
Cost of goods sold
Selling and
administrative
Total fixed expenses
Income (loss) from
operations
I
$
11
68 %
88 %
59
Analysis reveals the following percentages of variable costs in each division.
11
11
Division
Continue
88 %
59
III
81 %
47
III
81 %
47
III
IV
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.
74 %
$
59
Prepare an incremental analysis concerning the possible discontinuance of Division II. (Enter negative amounts using either a
negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
IV
74 %
59
IV
$446,000
248,000
45,000
$153,000
Eliminate
Net Income
Increase (Decrease)
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