QS 25-26 Segment elimination LO A1 A division of a large company reports the information shown...
QS 25-26 Segment elimination LO A1 A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed costs are avoidable, and 40% of the indirect fixed costs are avoidable. The following information are: Sales $ 200,000 Variable costs 145,000 Fixed costs Direct 30,000 Indirect 50,000 Operating loss $ (25,000 ) 1-a. Compute the total amount of avoidable expenses. 1-b. Based on this information, should the division be eliminated? Yes No
Homework Answers
(a)
avoidable expenses = variable costs + direct fixed costs + 40% of indirect fixed costs
= $145000 + $30000 + (40% x $50000)
= $195000
(b)
as the revenue is greater than avoidable expenses, the division should not be eliminated.
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QS 25-26 Segment elimination LO A1 A division of a large company
reports the information shown...
QS 10-14 Segment elimination LO A1 A division of a large company reports the information shown below for a recent y...
QS 10-14 Segment elimination LO A1 A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed costs are avoidable, and 40 % of the indirect fixed costs are avoidable. Based on this information, should the division be eliminated? Sales 270,000 149,000 Variable costs Fixed costs Direct 32,000 56,000 $ (33,000) Indirect Operating loss 1-a. Compare the amounts of total revenues and total avoidable expenses Revenues Avoidable expenses Revenues are greater...
A division of a large company reports the information shown below for a recent year. Variable...
A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed costs are avoidable, and 50% of the indirect fixed costs are avoidable. Based on this information, should the division be eliminated? Sales $ 260,000 Variable costs 146,000 Fixed costs Direct 31,000 Indirect 59,000 Operating loss $ (24,000 ) 1-a. Compare the amounts of total revenues and total avoidable expenses.
Check my work A division of a large company reports the information shown below for a...
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A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed...
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A division of a large company reports the information shown below for a recent year. Variable costs and direct fixed costs are avoidable, and 40% of the indirect fixed costs are avoidable. Based on this information, should the division be eliminated? $ 265,000 146,000 Sales Variable costs Fixed costs Direct Indirect Operating loss 39,000 51,000 (29,000) $ 1-a. Compare the amounts of total revenues and total avoidable expenses. Revenues Avoidable expenses Revenues are greater than (less than) avoidable expenses by
Exercise 23-13 Income analysis of eliminating Departments LO A1 Marinette Company makes several products, including canoes. The company has been experiencing losses from its canoe segment and is considering dropping that product line. The following information is available regarding its canoe segment. (Leave no cells blank. Enter zeros where appropriate.) points $3,600,000 eBook MARINETTE COMPANY Income Statement-Canoe Segment sales Variable costs Direct materials $ 770,000 Direct labor 820,000 Variable overhead 620.000 Variable selling and administrative 360,000 Total variable costs Contribution...
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QS 19-1 Computing unit cost under absorption costing LO P1 Vijay Company reports the following information regarding its production costs. 10 per unit 20 per unit Direct materials Direct labor Overhead costs for the year Variable overhead Fixed overhead Units produced 10 per unit $160,000 20,000 units Compute its product cost per unit under absorption costing. Product cost per unit QS 19-2 Computing unit cost under variable costing LO P1 Vijay Company reports the following information regarding its production costs....
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