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###### Business · Accounting
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Okoboji Company manufactures wooden canoes, and has four operating divisions: East, West, North, and South. Each division manufactures a unique model of canoe. During the first quarter of 2017, total net operating income was $70,000. A breakdown by division was as follows:  East West North South Sales$ 550,000 $750,000$950,000 $450,000 COGS 460,000 480,000 575,000 400,000 S & A expenses 120,000 220,000 250,000 125,000 Net Op. Income$ ( 30,000) $50,000$125,000 $(75,000) An internal cost analysis estimated that variable costs represented the following percentages of COGS and Selling/Administrative expenses in each division:  East West North South COGS 70% 85% 75% 60% S & A expenses 50% 60% 65% 75% Management is concerned about the two unprofitable divisions. Shutting down any division would eliminate about 60% of the fixed costs in that division. (YOU SHOULD ANSWER THOSE QUESTIONS BELOW ACCORDING TO INFORMATION IS GIVEN ABOVE ) THANKS 1. Complete the following table to calculate the Contribution margin of each division.  East West North South Sales$ 550,000 $750,000$950,000 $450,000 Variable costs Cont. margin Fixed costs Net Op. Income 2. Calculate the contribution margin ratio for each division. 3. Prepare separate schedules showing by how much (in dollars) companywide net operating income would increase or decrease as a result of shutting down each unprofitable division. First show the results of closing the South division only, then closing the East division only. Finally, show the results of closing both divisions. 4. Now assume that if the South division were eliminated, some of its customers would purchase canoes from the East division. Sales of the East division would rise to$600,000. Calculate the companywide net operating income after factoring in the closure of the South division and the new higher sales of the East division.

5. What others factors should be considered before the company shuts down any division?

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