7.5 (LO 6), AN Reported aggregate incom SILO 6), AN Khiw NV has four operating divisions. During the first quarter of 2020, the company aggregate income from operations of 213.000 and the following divisional results. Prepare incremental analysis concerning elimination of divisions. Division Sales Cost of goods sold 20 Selling and administrative expenses W e expenses Income (loss) from operations 250,000 200,000 75.000 (25.000) II 200,000 192,000 60.000 (52,000) III 500,000 300,000 60.000 140.000 IV 450,000 250,000 50.000 150.000 alysis reveals the following percentages of variable costs in each division Cost of goods sold Selling and administrative expenses 70C 40 90% 60 80 SO IV 759 60 prontinuance of any division would save 50% of the fixed costs and expenses for that division Too management is very concerned about the unprofitable divisions (I and II). Consensus is that one or both of the divisions should be discontinued. a. I 80,000 Instructions a. Compute the contribution margin for Divisions I and II. b. Prepare an incremental analysis concerning the possible discontinuance of (1) Division 1 and (2) Division II. What course of action do you recommend for each division? c. Prepare a columnar condensed income statement for Khiw, assuming Division II is eliminated. (Use the CVP format.) Division II's unavoidable fixed costs are allocated equally to the continuing divisions. d. Reconcile the total income from operations (213.000) with the total income from operations with out Division II Income III 132.800