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Ayayai Company has four operating divisions

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Ayayai Company has four operating divisions. During the first quarter of 2017, the company reported aggregate income from operations of $230,500 and the following divisional results. 
Division 
I 
II III 
IV 
Sales Cost of goods sold Selling and administrative expenses Income (loss) from operations 
$245,000 195,000 67,500 
$195,000 190,000 55,000 
$495,000 295,000 55,000 
$443,000 245,000 45,000 
$ (17,500) $ (50,000) $145,000 $153,000 
Analysis reveals the following percentages of variable costs in each division. 
I II III IV 
Cost of goods sold 
66 % 87 % 77 % 73 % 
Selling and administrative expenses 37 57 47 57 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.