Division I had a contribution margin of ($20,000) and Division II had a contribution margin of ($10,000). Sheridan Company reported total income from operations of $181,600 across its four divisions. Division I had sales of $100,000, variable costs of 80% of sales, and fixed costs of $30,000. Division II had sales of $60,000, variable costs of 70% of sales, and fixed costs of $20,000. Top management is concerned about the unprofitable Divisions I and II and considers discontinuing one or both.
What is the Contribution margin for Division I & Division II in $.pdf
1. What is the Contribution margin for Division I & Division II in $?? Sheridan Company has four
operating divisions. During the first quarter of 2022, the company reported aggregate income
from operations of $181,600 and the following divisional results. Analysis reveals the following
percentages of variable costs in each division. 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. (a) 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).)
