Analysis | |||
Continue | Eliminate | Net Income Increase | |
Sales | 2,480,000 | 2,000,000 | (480,000) |
Less:Variable costs | |||
Cost of Goods sold | 760,000 | 280,000 | 480,000 |
Operating expenses | 560,000 | 35,000 | 525,000 |
Total Variable costs | 1,320,000 | 315,000 | 1,005,000 |
Contribution Margin | 1,160,000 | 1,685,000 | (525,000) |
Less: Fixed costs | |||
Cost of Goods sold | 310,000 | 310,000 | - |
Operating expenses | 250,500 | 235,500 | 15,000 |
Total Fixed costs | 560,500 | 545,500 | 15,000 |
Net Income | 599,500 | 1,139,500 | (540,000) |
Hence, should not be eliminated
Exercise 199 (Part Level Submission) A recent accounting graduate from Marvel State University evaluated the operating...
Exercise 199 (Part Level Submission) A recent accounting graduate from Marvel State University evaluated thee operating performance of Fanning Company's four divisions. The following presentation was made to Fanning's Board of Directors. During the presentation, the accountant made the recommendation to eliminate the Southern Division stating that total net income would increase by $60,000. (See analysis below.) Southern Division Total Other Three Divisions $ 2,000,000 $480,000 $2,480,000 Sales 1,350,000 950,000 400,000 Cost of Goods Sold B0,000 1,130,000 1,050,000 Gross Profit...
CALCULATOR PRINTER VERSION 4 BACK NEXT Exercise 199 (Part Level Submission) A recent accounting graduate from Marvel State University evaluated the operating performance of Fanning Company's four divisions. The following presentation was made to Fanning's Board of Directors. During the presentation, the accountant made the recommendation to eliminate the Southern Division stating that total net income would increase by $60,000. (See analysis below.) Southern Division Total Sales Cost of Goods Sold Gross Profit Operating Expenses Net Income Divisions $ 2,000,000...
A recent accounting graduate from Lethbridge University evaluated the operating performance of Fane Company's three divisions. The following presentation was made to Fane’s Board of Directors. During the presentation, the accountant made the recommendation to eliminate the Southern Division stating that total net income would increase by $20,000, as shown in the analysis below. Other Two Divisions Southern Division Total Sales $1,000,000 $300,000 $1,300,000 Cost of Goods Sold 650,000 200,000 850,000 Gross Profit 350,000 100,000 450,000 Operating Expenses 100,000 120,000 220,000 Net Income $ 250,000 $...
Veronica Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Dunn Company's six divisions. Veronica made the following presentation to Dunn's board of directors and suggested the Percy Division be eliminated. "If the Percy Division is eliminated' she said. "our total profits would increase by $27,200." Total Sales Cost of goods sold The Other The Other Percy Five Divisions Division $1,665,000 $100,100 977.400 76,900 687,600 23,200 528,700 50,400 $158,900 $(27,200) Gross profit $1,765,100 1,054,300 710,800 579,100...
PROBLEM 1 A recent accounting graduate from Marvel State University evaluated the operating performance of Fanning Company's four divisions. The following presentation was made to Fanning's Board of Directors. During the presentation, the accountant made the recommendation to eliminate the Southern Division stating that total net income would increase by $60,000. (See analysis below.) Other Three Divisions Total Sales $2,000,000 $480,000 Southern Division $2,480,000 400,000 Cost of Goods Sold 950,000 1,350,000 Gross Profit 1,050,000 80,000 1,130,000 800,000 140,000 Operating Expenses...
A recent accounting graduate from Lethbridge University evaluated the operating performance of Fane Company's three divisions. The following presentation was made to Fane’s Board of Directors. During the presentation, the accountant made the recommendation to eliminate the Southern Division stating that total net income would increase by $20,000, as shown in the analysis below. Other Two Divisions Southern Division Total Sales $1,000,000 $300,000 $1,300,000 Cost of Goods Sold 650,000 200,000 850,000 Gross Profit 350,000 100,000 450,000 Operating Expenses 100,000 120,000 220,000 Net Income $ 250,000 $...
Exercise 20-15 Veronica Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Dunn Company's six divisions. Veronica made the following presentation to Dunn's board of directors and suggested the Percy Division be eliminated. "If the Percy Division is eliminated," she said, "our total profits would increase by $26,600." Sales Cost of goods sold Gross profit Operating expenses Net income The Other Percy Five Divisions Division $1,664,000 $100,000 978,000 76,900 686,000 23,100 526,300 49,700 $159,700 $ (26,600)...
Exercise 7-15 (Video) Veronica Mars, a recent graduate of Bell's accounting program, evaluated the operating performance of Dunn Company's six divisions. Veronica made the following presentation to Dunn's board of directors and suggested the Percy Division be eliminated. "If the Percy Division is eliminated," she said, "our total profits would increase by $26,600." Sales Cost of goods sold Gross profit Operating expenses Net income The Other Percy Five Divisions Division $1,664,000 $100,500 978,500 76,700 685,500 23,800 527,500 50,400 $158,000 $...
Exercise 20-15 (Video) Ruth Lewis, a recent graduate of Bell's accounting program, evaluated the operating performance of Sunland Company's six divisions. Ruth made the following presentation to Sunland's board of directors and suggested the Percy Division be eliminated. "If the Percy Division is eliminated," she said, "our total profits would increase by $26,100." Sales Cost of goods sold Gross profit Operating expenses Net income The Other Percy Five Divisions Division $1,664,000 $100,300 977,900 76,300 686,100 24,000 528,000 50,100 $158,100 $...
Sheffield Mars, a recent graduate of Bell’s accounting program, evaluated the operating performance of Dunn Company’s six divisions. Sheffield made the following presentation to Dunn’s board of directors and suggested the Percy Division be eliminated. “If the Percy Division is eliminated,” she said, “our total profits would increase by $25,500.” The Other Five Divisions Percy Division Total Sales $1,665,000 $100,700 $1,765,700 Cost of goods sold 978,100 76,600 1,054,700 Gross profit 686,900 24,100 711,000 Operating expenses 528,100 49,600 577,700 Net income...