Explore BrainMass
Share

Incremental contribution margin

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

I am working on cost analysis and got stuck on the incremental contribution margin. It's number 2 in the worksheet attached. I put my notes of what I was trying to do next to the line items.

© BrainMass Inc. brainmass.com October 24, 2018, 8:25 pm ad1c9bdddf
https://brainmass.com/business/financial-ratios/incremental-contribution-margin-96366

Attachments

Solution Preview

2. Incremental contribution margin:
Increased sales $24,000 (Contribution on Increased ...

Solution Summary

This solution provides students with a brief explanation of how to determine the incremental contribution margin, using information in a provided Excel spreadsheet. The expert provides equation and brief text explanation.

$2.19
See Also This Related BrainMass Solution

Contribution margin, incremental analysis, income statement

See attached file.

Lewis Manufacturing Company has four operating divisions. During the first quarter of 2005, the company reported aggregate income from operations of $176,000 and following division results. See attachment.

Instructions

a. Computer the contribution margin for divisions I and II?
b. Prepare an incremental analysis concerning the possible discontinuance of (1) Division I and (2) Division II. What course of action do you recommend for each division?
c. Prepare a columnar condensed income statement for Lewis Manufacturing, assuming Division II is eliminated. Use the CVP format. Division II's unavoidable fixed cost are allocated equally to the continuing divisions.
d. Reconcile the total income from operations ($176,000) with the total income from operations without Division II.

View Full Posting Details