Homework Answers
Solution:
Current Total operating income = $75,000
If micorwave product discontinued then loss of contribution margin = $45,000
Increase in income due to additional contribution margin from increased sale of Toaster = 6300*$12 = $75,600
Saving in fixed costs = $34,000
Total increase in net operating income on discontinue microwave product = Increase in contribution margin of toaster + Saving in fixed costs - Loss of contribution margin from microwave
= $75,600 + $34,000 - $45,000 = $64,600
Therefore difference in total operating income under current scenario and proposed scenario = $64,600
Add Answer to:
Part C: Deciding whether to discontinue a product, department, or store The income statement for Germain...
Which of the following is not relevant when deciding whether or not to discontinue a product...
Which of the following is not relevant when deciding whether or not to discontinue a product line? A. The product line's contribution margin. B. Fixed costs that cannot be avoided by discontinuing the line. C. The effect on the sales of other products if the product line is discontinued. D. Fixed costs that can be avoided by discontinuing the line.
Discontinue a Segment Esther Corporation has the following three divisions, Alpha, Bravo and Charlie. Determine whether...
Discontinue a Segment Esther Corporation has the following three divisions, Alpha, Bravo and Charlie. Determine whether or not Charlie Division should be discontinued. All fixed costs are unavoidable. Alpha Bravo Charlie Total Sales 500,000 450,000 600,000 1,550,000 Cost of Goods Sold Variable 200,000 150,000 300,000 650,000 Fixed 50,000 50,000 100,000 200,000 Total CGS 250,000 200,000 400,000 850,000 Gross Margin 250,000 250,000 200,000 700,000 Operating Expenses Variable 175,000 200,000 200,000 575,000 Fixed 25,000 25,000 25,000 75,000 Total Operating Expenses 200,000 225,000 225,000...
The income statement for Lovely Locks is divided by its two product lines, Curling Irons and...
The income statement for Lovely Locks is divided by its two product lines, Curling Irons and Straighteners, as follows: Curling Irons Straighteners Total Sales revenue $650,000 $260,000 $910,000 Variable expenses $490,000 $210,000 $700,000 Contribution margin $160,000 $50,000 $210,000 Fixed expenses $90,000 $90,000 $180,000 Operating income (loss) $70,000 -$40,000 $30,000 If Lovely Locks can eliminate fixed costs of $33,000 and increase the sale of Curling Irons by 6500 units at a selling price of $33 per unit and a contribution...
Answer these 2 problems. E8-23A Decide whether to discontinue a product line (Learning Objective 4) Top...
Answer these 2 problems.
E8-23A Decide whether to discontinue a product line (Learning Objective 4) Top managers of Vermont Flooring are alarmed by their operating losses. They sidering dropping the laminate flooring product line. Company accountants have pared the following analysis to help make this decision: Vermont Flooring Product Line Contribution Margin Income Statement For the Year Product lines Laminate od flooring flooring Company Total 306000 128.000 434000 7 Sales revenue 156000 22.000 238000 8 Les Variable expenses 150 000...
Discontinue? Chapter 8: Dropping a product line The managers at Manchester's Department Store are concerned about...
Discontinue?
Chapter 8: Dropping a product line The managers at Manchester's Department Store are concerned about the operation of its sporting goods department, which has not been very successful. The following condensed income statement gives the latest year's results: Manchester Department Store Contribution Margin Income Statement For the Year Ended December 31 Product Lines Sporting Goods $480,000 $385,000 $95,000 All Other Departments $2,400,000 $1,560,000 $840,000 Totals Sales Revenue $2,880,000 $1.945,000 $935,000 Less: Variable Costs: Contribution Margin Less: Fixed Costs Manufacturing...
1. Prepare an incremental analysis to show whether Security FirstSecurity First should discontinue the industrial systems...
1.
Prepare an incremental analysis to show whether Security
FirstSecurity First should discontinue the industrial systems
product line.
2.
Prepare contribution margin income statements to show Security
First's total operating income under the two alternatives: (a)
with the industrial systems line and (b) without the line. Compare
the difference between the two alternatives' income numbers to
your answer to Requirement 1. What have you learned from this
comparison?
Company accountants estimate that discontinuing the industrial systems line will decrease fixed...
complete this 's, and Accesso- ding depreciation and 58-6 Decide whether to discontinue a department (Learning...
complete this
's, and Accesso- ding depreciation and 58-6 Decide whether to discontinue a department (Learning Objective 4) Devine Fashion in Chicago operates three departments: Men's, Women's, and Acce ries. Devine Fashion allocates all fixed expenses (unavoidable building depreciation utilities) based on each department's square footage. Departmental operating incom data for the third quarter of the current year are as follows: WN Devine Fashions Product Line Contribution Margin Income Statement For the Year $ Men's 105,000 58,000 47,000 25.000 22,000...
S8-5 Decide whether to discontinue a department (Learning Objective 4) Mila Fashion in New York operates...
S8-5 Decide whether to discontinue a department (Learning Objective 4) Mila Fashion in New York operates three departments: Men's, Women's, and Accessories. Mila Fashion allocates all fixed expenses (unavoidable building depreciation and utilities) based on each department's square footage. Departmental operating income data for the third quarter of the current year are as follows: WN Mila Fashions Product Line Contribution Margin Income Statement For the Year 6 7 Sales revenue 8 Less: Variable expenses 9 Contribution margin 10 Less: Fixed...
Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the...
Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow Total Luxury Sporty Sales revenue $530,000 $400,000 $130,000 Variable expenses 345,000 225,000 120,000 Contribution margin 185,000 175,000 10,000 Fixed expenses 79.000 39.500 39,500 Operating income (loss) $106,000 $135,500 $(29,500) 1f $22,000 of fixed costs will be eliminated by discontinuing the Sporty line, how will operating income be affected? OA. Increase $12.000 O B. Decrease $32,000 OC. Increase 5224000 OD. Increase...
Decision to Discontinue a Product On the basis of the following data, the general manager of...
Decision to Discontinue a Product On the basis of the following data, the general manager of Hawkeye Shoes Inc. decided to discontinue Children’s Shoes because it reduced operating income by $30,000. Hawkeye Shoes Inc. Product-Line Income Statement For the Year Ended November 30, 20Y8 Children's Shoes Men's Shoes Women's Shoes Total Sales $280,000 $300,000 $500,000 $1,080,000 Costs of goods sold: Variable costs $(135,000) $(150,000) $(220,000) $(505,000) Fixed costs (45,000) (60,000) (120,000) (225,000) Total cost of goods sold $(180,000) $(210,000) $(340,000)...
Answer these 2 problems.
E8-23A Decide whether to discontinue a product line (Learning Objective 4) Top managers of Vermont Flooring are alarmed by their operating losses. They sidering dropping the laminate flooring product line. Company accountants have pared the following analysis to help make this decision: Vermont Flooring Product Line Contribution Margin Income Statement For the Year Product lines Laminate od flooring flooring Company Total 306000 128.000 434000 7 Sales revenue 156000 22.000 238000 8 Les Variable expenses 150 000...
Discontinue?
Chapter 8: Dropping a product line The managers at Manchester's Department Store are concerned about the operation of its sporting goods department, which has not been very successful. The following condensed income statement gives the latest year's results: Manchester Department Store Contribution Margin Income Statement For the Year Ended December 31 Product Lines Sporting Goods $480,000 $385,000 $95,000 All Other Departments $2,400,000 $1,560,000 $840,000 Totals Sales Revenue $2,880,000 $1.945,000 $935,000 Less: Variable Costs: Contribution Margin Less: Fixed Costs Manufacturing...
1.
Prepare an incremental analysis to show whether Security
FirstSecurity First should discontinue the industrial systems
product line.
2.
Prepare contribution margin income statements to show Security
First's total operating income under the two alternatives: (a)
with the industrial systems line and (b) without the line. Compare
the difference between the two alternatives' income numbers to
your answer to Requirement 1. What have you learned from this
comparison?
Company accountants estimate that discontinuing the industrial systems line will decrease fixed...
complete this
's, and Accesso- ding depreciation and 58-6 Decide whether to discontinue a department (Learning Objective 4) Devine Fashion in Chicago operates three departments: Men's, Women's, and Acce ries. Devine Fashion allocates all fixed expenses (unavoidable building depreciation utilities) based on each department's square footage. Departmental operating incom data for the third quarter of the current year are as follows: WN Devine Fashions Product Line Contribution Margin Income Statement For the Year $ Men's 105,000 58,000 47,000 25.000 22,000...
S8-5 Decide whether to discontinue a department (Learning Objective 4) Mila Fashion in New York operates three departments: Men's, Women's, and Accessories. Mila Fashion allocates all fixed expenses (unavoidable building depreciation and utilities) based on each department's square footage. Departmental operating income data for the third quarter of the current year are as follows: WN Mila Fashions Product Line Contribution Margin Income Statement For the Year 6 7 Sales revenue 8 Less: Variable expenses 9 Contribution margin 10 Less: Fixed...
Westfall Watches has two product lines: Luxury watches and Sporty watches. Income statement data for the most recent year follow Total Luxury Sporty Sales revenue $530,000 $400,000 $130,000 Variable expenses 345,000 225,000 120,000 Contribution margin 185,000 175,000 10,000 Fixed expenses 79.000 39.500 39,500 Operating income (loss) $106,000 $135,500 $(29,500) 1f $22,000 of fixed costs will be eliminated by discontinuing the Sporty line, how will operating income be affected? OA. Increase $12.000 O B. Decrease $32,000 OC. Increase 5224000 OD. Increase...
Most questions answered within 3 hours.
-
Each protein is composed of a maximum of ____________ different
amino acids in varying numbers and...
asked 3 minutes ago -
The mayor of a town has proposed a plan for the construction of
a new community....
asked 13 minutes ago -
2. KopyKat is a firm that specializes in printing business cards
using the latest laser technology....
asked 33 minutes ago -
What type of stock pays dividends in arrears?
A.
Nonminus−cumulative
preferred stock
B.
Cumulative preferred stock...
asked 31 minutes ago -
Discuss what issues you see as needing to be addressed in an
organization in order to...
asked 33 minutes ago -
Why does varying input frequency to a buck converter affect the
magnitude of the output voltage...
asked 36 minutes ago -
Given the following reduction half-reactions:
Fe3+(aq)+e−→Fe2+(aq)
E∘red=+0.77V
S2O2−6(aq)+4H+(aq)+2e−→2H2SO3(aq)
E∘red=+0.60V
N2O(g)+2H+(aq)+2e−→N2(g)+H2O(l)
E∘red=−1.77V
VO+2(aq)+2H+(aq)+e−→VO2+(aq)+H2O(l)
E∘red=+1.00V
Write balanced chemica
asked 37 minutes ago -
Consider a random variable X with PDF given by f(x)=1/10 for x =
0, 1, 2,...,9....
asked 35 minutes ago -
This is QA Tester's task
What was the most heinous bug that you let slip through?...
asked 48 minutes ago -
What is the chemical equation (with states) for this
reaction in balanced and unbalanced form?
In...
asked 52 minutes ago -
In engineering and product design, it is important to consider
the weights of people so that...
asked 57 minutes ago -
The first-order decomposition of N2O5 at 328 K has a rate
constant of 1.70 × 10-3...
asked 59 minutes ago