Relation Corporation has four operating divisions. The budgeted revenues and expenses for each division for 2020 follows
Posted: Thu Apr 28, 2022 10:35 am
- Relation Corporation Has Four Operating Divisions The Budgeted Revenues And Expenses For Each Division For 2020 Follows 1 (8.88 KiB) Viewed 19 times
- Relation Corporation Has Four Operating Divisions The Budgeted Revenues And Expenses For Each Division For 2020 Follows 2 (22.02 KiB) Viewed 19 times
- Relation Corporation Has Four Operating Divisions The Budgeted Revenues And Expenses For Each Division For 2020 Follows 3 (37.69 KiB) Viewed 19 times
- Relation Corporation Has Four Operating Divisions The Budgeted Revenues And Expenses For Each Division For 2020 Follows 4 (34.72 KiB) Viewed 19 times
Requirement 1. Calculate the increase or decrease in operating income if Aristide closes division A. Begin by calculating Division A's contribution margin. Division A Sales Contribution margin
- X Data table Division А B C D Sales $ 570,000 $ 480,000 $ 940,000 $ 770,000 Cost of goods sold 500,000 375,000 530,000 480,000 Selling, general, and administrative expenses 125,000 110,000 235,000 185,000 $ (55,000) $ Operating income/loss (5,000) $ 175,000 $ 105,000 Further analysis of costs reveals the following percentages of variable costs in each division: Division А B С D Cost of goods sold 85 % 91 % 89 % 80 % Selling, general, and administrative expenses 64 % 83 % 66% 65 % Print Done
- - Х Requirements 1. Calculate the increase or decrease in operating income if Aristide closes division A. 2. Calculate the increase or decrease in operating income if Aristide closes division B. 3. What other factors should the top management of Aristide consider before making a decision? Print Done