Homework Answers
Financial Advantage(disadvantage) of discontinuing = Fixed costs avoided – Contribution Margin lost
Unavoidable costs which will be incurred under both the scenarios are not relevant for this decision.
Hence, financial advantage is as follows:
Fixed costs avoided = 800,000-378,000 = $422,000
Less:
Contribution Margi n lost of linens department = $592,000
Contribution Margin lost of Hardware department = 2,230,000*15% = $334,500
Financial Advantage (disadvantage) of closing = $(504,500)
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omework Help Sev Exercise 11-17 Dropping or Retaining a Segment [L011-2 Bed & Bath, a retalling...
Exercise 11-17 Dropping or Retalning a Segment [LO11-2] Bed & Bath, a retailing company, has two...
Exercise 11-17 Dropping or Retalning a Segment [LO11-2] Bed & Bath, a retailing company, has two departments --Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Department Total Hardware Linens $4,130,000 $3,010,000 $1,120,000 1,308,000 904,000 404,800 2,822,000 2,106,000 716,890 2,140,000 1,320,000 820,000 $ 682,000 $ 786,800 $ (104,000) A study indicates that $378,000 of the fixed expenses being charged to Linens are sunk costs or...
Exercise 11-17 Dropping or Retaining a Segment (LO11-2] Bed & Bath, a retailing company has two...
Exercise 11-17 Dropping or Retaining a Segment (LO11-2] Bed & Bath, a retailing company has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Total $ 4,220,00 1,348,800 2,872, eee 2,240,00 Department Hardware Linens $ 3,850, eee $ 1,178,888 934, eee 414,888 2, 116, eee 756,888 1,340,899 980,000 $ 276.000 s (144.eee) 632eee A Study indicates that $374,000 of the fixed expenses being charged...
Exercise 11-17 Dropping or Retaining a Segment (LO11-2) Bed & Bath, a retailing company has two...
Exercise 11-17 Dropping or Retaining a Segment (LO11-2) Bed & Bath, a retailing company has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Department Total Hardware Linens $4,250,000 $), DED, ODDS1,190,000 Variable expenses Contribution margin 772.000 2,339,000 2.350.000 2.067.000 1.000.000 A study indicates that $374,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped in addition, the elimination of...
Exercise 11-17 Dropping or Retaining a Segment (LO11-2) Bed & Bath, a retailing company has two...
Exercise 11-17 Dropping or Retaining a Segment (LO11-2) Bed & Bath, a retailing company has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Department Total Hardware Linens $ 4,250,000 $3,060,000 $1,190,000 1,411,000 993,000 418,000 2,839,000 2,067,000 772,000 2,350,000 1,480,000 $70,000 $ 489,000 $ 587,000$ (98,000) A study indicates that $374,000 of the fixed expenses being charged to Linens are sunk costs or allocated...
Bed & Bath, a retailing company, has two departments—Hardware and Linens. The company’s most recent monthly...
Bed & Bath, a retailing company, has two departments—Hardware and Linens. The company’s most recent monthly contribution format income statement follows: Department Total Hardware Linens Sales $ 4,130,000 $ 3,100,000 $ 1,030,000 Variable expenses 1,358,000 942,000 416,000 Contribution margin 2,772,000 2,158,000 614,000 Fixed expenses 2,170,000 1,310,000 860,000 Net operating income (loss) $ 602,000 $ 848,000 $ (246,000 ) A study indicates that $376,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue...
Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly...
Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Department Total Hardware Linens $ 4,310,000 $ 3,150,000 $ 1,160,000 1,319,000 912,000 407,000 2,991,000 2,238,000 753,000 2,270,000 1,370,000 900,000 $ 721,000 $ 868,000 $ (147,000) A study indicates that $378,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even...
Bed & Bath, a retailing company, has two departments—Hardware and Linens. The company’s most recent monthly...
Bed & Bath, a retailing company, has two departments—Hardware and Linens. The company’s most recent monthly contribution format income statement follows: Department Total Hardware Linens Sales $ 4,370,000 $ 3,190,000 $ 1,180,000 Variable expenses 1,334,000 915,000 419,000 Contribution margin 3,036,000 2,275,000 761,000 Fixed expenses 2,200,000 1,360,000 840,000 Net operating income (loss) $ 836,000 $ 915,000 $ (79,000 ) A study indicates that $378,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue...
Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly...
Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Department Total Hardware Linens Sales $ 4,330,000 $ 3,190,000 $1,140,000 Variable expenses Contribution margin 1,385,000 967,000 418,000 2,945,000 2,223,000 722,000 Fixed expenses 2,320,000 1,450,000 870,000 Net operating income (1oss) 625,000 77३,०00 । (148,000) A study indicates that $378,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens...
Bed & Bath, a retailing company, has two departments—Hardware and Linens. The company’s most recent monthly...
Bed & Bath, a retailing company, has two
departments—Hardware and Linens. The company’s most recent monthly
contribution format income statement follows:
Department
Total
Hardware
Linens
Sales
$
4,230,000
$
3,050,000
$
1,180,000
Variable expenses
1,258,000
839,000
419,000
Contribution margin
2,972,000
2,211,000
761,000
Fixed expenses
2,250,000
1,440,000
810,000
Net operating income (loss)
$
722,000
$
771,000
$
(49,000
)
A study indicates that $371,000 of the fixed expenses being
charged to Linens are sunk costs or allocated costs that will
continue...
Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly...
Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Department Hardware Linens Total $ 4,240,000 $ 3,120,000 ş1,120,000 Sales Variable expenses 1,335,000 934,000 401,000 Contribution margin 2,186,000 719,000 2,905,000 Fixed expenses 2,130,000 1,330,000 800,000 775,000 $ 856,000 $ Net operating income (loss) (81,000) A study indicates that $377,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the...
Exercise 11-17 Dropping or Retalning a Segment [LO11-2] Bed & Bath, a retailing company, has two departments --Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Department Total Hardware Linens $4,130,000 $3,010,000 $1,120,000 1,308,000 904,000 404,800 2,822,000 2,106,000 716,890 2,140,000 1,320,000 820,000 $ 682,000 $ 786,800 $ (104,000) A study indicates that $378,000 of the fixed expenses being charged to Linens are sunk costs or...
Exercise 11-17 Dropping or Retaining a Segment (LO11-2] Bed & Bath, a retailing company has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Total $ 4,220,00 1,348,800 2,872, eee 2,240,00 Department Hardware Linens $ 3,850, eee $ 1,178,888 934, eee 414,888 2, 116, eee 756,888 1,340,899 980,000 $ 276.000 s (144.eee) 632eee A Study indicates that $374,000 of the fixed expenses being charged...
Exercise 11-17 Dropping or Retaining a Segment (LO11-2) Bed & Bath, a retailing company has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Department Total Hardware Linens $4,250,000 $), DED, ODDS1,190,000 Variable expenses Contribution margin 772.000 2,339,000 2.350.000 2.067.000 1.000.000 A study indicates that $374,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped in addition, the elimination of...
Exercise 11-17 Dropping or Retaining a Segment (LO11-2) Bed & Bath, a retailing company has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Department Total Hardware Linens $ 4,250,000 $3,060,000 $1,190,000 1,411,000 993,000 418,000 2,839,000 2,067,000 772,000 2,350,000 1,480,000 $70,000 $ 489,000 $ 587,000$ (98,000) A study indicates that $374,000 of the fixed expenses being charged to Linens are sunk costs or allocated...
Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) Department Total Hardware Linens $ 4,310,000 $ 3,150,000 $ 1,160,000 1,319,000 912,000 407,000 2,991,000 2,238,000 753,000 2,270,000 1,370,000 900,000 $ 721,000 $ 868,000 $ (147,000) A study indicates that $378,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even...
Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Department Total Hardware Linens Sales $ 4,330,000 $ 3,190,000 $1,140,000 Variable expenses Contribution margin 1,385,000 967,000 418,000 2,945,000 2,223,000 722,000 Fixed expenses 2,320,000 1,450,000 870,000 Net operating income (1oss) 625,000 77३,०00 । (148,000) A study indicates that $378,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens...
Bed & Bath, a retailing company, has two
departments—Hardware and Linens. The company’s most recent monthly
contribution format income statement follows:
Department
Total
Hardware
Linens
Sales
$
4,230,000
$
3,050,000
$
1,180,000
Variable expenses
1,258,000
839,000
419,000
Contribution margin
2,972,000
2,211,000
761,000
Fixed expenses
2,250,000
1,440,000
810,000
Net operating income (loss)
$
722,000
$
771,000
$
(49,000
)
A study indicates that $371,000 of the fixed expenses being
charged to Linens are sunk costs or allocated costs that will
continue...
Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Department Hardware Linens Total $ 4,240,000 $ 3,120,000 ş1,120,000 Sales Variable expenses 1,335,000 934,000 401,000 Contribution margin 2,186,000 719,000 2,905,000 Fixed expenses 2,130,000 1,330,000 800,000 775,000 $ 856,000 $ Net operating income (loss) (81,000) A study indicates that $377,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the...
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