Brislin Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $213,000 and the following divisional results. Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations Cost of goods sold Selling and administrative expenses Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations Cost of goods sold Selling and administrative expenses Analysis reveals the following percentages of variable costs in each division. I $250,000 $200,000 200,000 192,000 300,000 75,000 60,000 60,000 $(25,000) $(52.000) $140,000 1 70 % 40 I I 11 90 % 40 11 60 Division 11 60 ||| IV 80 % 75 % 50 $500,000 200,000 75,000 $(25,000) $(52,000) $140,000 192,000 III 11 70 % 90 % 80 % 50 60,000 60 ||| $250,000 $200,000 $500,000 $450,000 250,000 Analysis reveals the following percentages of variable costs in each division. 300,000 60,000 IV IV 75 % 60 $450,000 250,000 50,000 $150,000 IV 50,000 $150,000 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.
Brislin Company has four operating divisions. During the first quarter of 2022, the company reported aggregate income from operations of $213,000 and the following divisional results. Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations Cost of goods sold Selling and administrative expenses Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations Cost of goods sold Selling and administrative expenses Analysis reveals the following percentages of variable costs in each division. I $250,000 $200,000 200,000 192,000 300,000 75,000 60,000 60,000 $(25,000) $(52.000) $140,000 1 70 % 40 I I 11 90 % 40 11 60 Division 11 60 ||| IV 80 % 75 % 50 $500,000 200,000 75,000 $(25,000) $(52,000) $140,000 192,000 III 11 70 % 90 % 80 % 50 60,000 60 ||| $250,000 $200,000 $500,000 $450,000 250,000 Analysis reveals the following percentages of variable costs in each division. 300,000 60,000 IV IV 75 % 60 $450,000 250,000 50,000 $150,000 IV 50,000 $150,000 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.
Chapter9: Responsibility Accounting And Decentralization
Section: Chapter Questions
Problem 8PA: The following revenue data were taken from the December 31, 2017, Coca-Cola annual report (10-K):...
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