10. If an unprofitable segment is eliminated:
A) Net income will always increase.
B) Variable expenses of the eliminated segment will have to be absorbed by other segments.
C) Fixed expenses allocated to the eliminated segment will have to be absorbed by other segments.
D) Net income will always decrease. If an unprofitable segment is eliminated:
Option C
When the unprofitable segment us eliminated, the Unavoidable fixed costs of that segment will have to be absorbed by the other segments.
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10. If an unprofitable segment is eliminated: A) Net income will always increase. B) Variable expenses...
of the following is incorrect about variance reports? facilitate management by exception" they should only be sent to the top level of management They should be prepared as soon as possible They may vary in form, content, and frequency among companies. using variance reports to evaluate cost control management normally looks into: All variances Favorable variances only Unfavorable variances only Both favorable and unfavorable variances that exceed a predetermined quantity measure such as a percentage or dollar amount. 25. Which...
A segment has the following data: Sales Variable costs Fixed costs $630,000 376,000 375,500 What will be the incremental effect on net income if this segment is eliminated, assuming the fixed costs will be allocated to profitable segments? O A. $254,500 increase OB. $254,000 decrease O C. $375,500 decrease OD. $376,000 decrease
question #10 Dropping an unprofitable product line or business segment will always increase profits. True or False True False
All other things equal, if a division's traceable fixed expenses increase: A) the division's segment margin will increase. B) the overall company net operating income will decrease. C) the division's contribution margin will decrease. D) the division's sales volume will increase.
Net Income Increase (Decrease) Continue Eliminate $ $ $ Sales Variable costs Cost of goods sold Operating expenses Total variable Contribution margin Fixed costs Cost of goods sold Operating expenses Total fixed $ $ $ Net income (loss) tA tA 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...
Sales Variable expenses Contribution margin Fixed expenses Net income Tingler $298,000 150,900 147,100 121,380 $25,720 Shocker $502,000 206,400 295,600 234,920 $60,680 Stunner $200,000 136,900 63,100 96,600 $(33,500) Fixed expenses consist of $310,000 of common costs allocated to the three products based on relative sales, as well as direct fixed expenses unique to each model of $29,000 (Tingler), $79,300 (Shocker), and $34,600 (Stunner). The common costs will be incurred regardless of how many models are produced. The direct fixed expenses would...
9 Helmers Corporation manufactures a single product. Variable costing net operating income last year was $77,000 and this year was $92,300. Last year, $28,700 in fixed manufacturing overhead costs were released from inventory under absorption costing. This year, $10,900 in fixed manufacturing overhead costs were deferred in inventory under absorption costing. What was the absorption costing net operating income last year? Multiple Choice $81,400 $77,000 $48,300 $105,700 10 Tubaugh Corporation has two major business segments- -East and West. In December,...
Helmers Corporation manufactures a single product Variable costing net operating Income last year was $77,000 and this year was $92,300. Last year, $28,700 In fixed manufacturing overhead costs were released from Inventory under absorption costing. This year, $10,900 In fixed manufacturing overhead costs were deferred In Inventory under absorption costing. What was the absorption costing net operating Income last year? Multiple Choice $81,400 O $77.000 0 $48,300 0 $105,700 Tubaugh Corporation has two major business segments--East and West. In December,...
The contribution margin ratio always decreases when: A.the fixed expenses increase. B.fixed expenses decrease. C.variable expenses as a percentage of net sales increase. D.variable expenses as a percentage of net sales decrease.
Which of the following statement is always correct: a. If a transaction decreases net income, it will decrease total assets on the balance sheet. b. If a transaction increases net income, it will increase retained earnings on the balance sheet. c. If a transaction increases revenue, it will increase total assets on the balance sheet. d. If a transaction increases expenses, it will have no effect on the balance sheet.