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Problem 12-5 Swifty Company has four operating divisions. During the first quarter of 2017, the...

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Problem 12-5 Swifty Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $215,000 and the following divisional results. Division IT Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations $249,000 199,000 76,000 $(26,000) $200,000 191,000 63,000 $ (54,000) $504,000 296,000 64,000 $144,000 $450,000 249,000 50,000 5151,000 Analysis reveals the following percentages of variable costs in each division. I II Cost of goods sold Selling and administrative expenses 74 39 III 794 51 IV 245 61 60 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. CALCULATOR FULL SCREEN PRINTERS SWIFTY COMPANY CVP Income Statement Divisions Total Sales Variable costs Cost of goods sold Selling and administrative Total variable costs Contribution margin Fixed costs Cost of goods sold Selling and administrative Total fixed costs Income (loss) from operations

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