Hayden Manufacturing has three product lines. Its only unprofitable product line is Product 22 which generates...
Hayden Manufacturing has three product lines. Its only unprofitable product line is Product 22 which generates sales of $700,000 per year. The annual costs associated with Product 22 are $460,000 of variable expenses and $300,000 of fixed expenses. If Hayden eliminates the Product 22 line, 30% of the fixed expenses can be eliminated. What are the relevant costs that should be analyzed by Hayden’s managers in making this decision?
Homework Answers
Relevant cost = Variable Exp + Avoidable Fixed Cost
Variable Exp = $460000
Avoidable Fixed Exp = $300000 * 30% = $90000
Relevant cost = $460000 + $90000 = $550000
Add Answer to:
Hayden Manufacturing has three product lines. Its only
unprofitable product line is Product 22 which generates...
The following monthly segmented income statement is for Condiment Company, which has three separate product lines...
The following monthly segmented income statement is for Condiment Company, which has three separate product lines (A, B, and C). A B C Total Sales revenue $37,500 $50,000 $12,500 $100,000 Variable costs $16,000 $27,500 $5,000 $48,500 Contribution margin $21,500 $22,500 $7,500 $51,500 Direct fixed costs $19,500 $16,000 $3,500 $39,000 Allocated fixed costs $3,750 $5,000 $1,250 $10,000 Profit (loss) $(1,750) $1,500 $2,750 $2,500 Management is concerned about the losses associated with product line A and is considering dropping this product line....
A company has three product lines, one of which reflects the following results: Sales $170,000 Variable...
A company has three product lines, one of which reflects the following results: Sales $170,000 Variable expenses $100,000 Contribution Margin $70,000 Fixed expenses $110,000 Net loss $(40,000) If this product line is eliminated, 60% of the fixed expenses can be eliminated. If management decides to eliminate this product line, the company's net income will increase/decrease by?
Shown below is a segmented income statement for Hickory Company's three wooden flooring product lines: Strip...
Shown below is a segmented income statement for Hickory Company's three wooden flooring product lines: Strip Plank Parquet Total Sales revenue $400,000 $200,000 $300,000 $900,000 Less: Variable expenses 225,000 120,000 250,000 595,000 Contribution margin $175,000 $ 80,000 $ 50,000 $305,000 Less direct fixed expenses: Machine rent (5,000) (20,000) (50,000) (75,000) Supervision (10,000) (20,000) (45,000) (15,000) (35,000) Depreciation (10,000) (25,000) (70,000) Segment margin $120,000 $ 40,000 $ (45,000) $115,000 Hickory's management is deciding whether to keep or drop the parquet product...
Multiple Choice Question 153 A company has three product lines, one of which reflects the following...
Multiple Choice Question 153 A company has three product lines, one of which reflects the following results: Sales Variable expenses Contribution margin Fixed expenses Net loss $184000 101000 83000 130000 $ (47000) If this product line is eliminated, 60% of the wed expenses can be eliminated and the other 40% will be located to other product lines. It management decides to eliminate this product line, the company's net income will increase by $5000 decrease by S5000 increase by 547000 decrease...
Structuring a Keep-or-Drop Product Line Problem with Complementary Effects Shown below is a segmented income statement...
Structuring a Keep-or-Drop Product Line Problem with Complementary Effects Shown below is a segmented income statement for Hickory Company's three wooden flooring product lines: Strip Plank Parquet Total Sales revenue $400,000 $200,000 $300,000 $900,000 Less: Variable expenses 225,000 120,000 250,000 595,000 Contribution margin $175,000 $ 80,000 $ 50,000 $305,000 Less direct fixed expenses: Machine rent (5,000) (20,000) (30,000) (55,000) Supervision (15,000) (10,000) (5,000) (30,000) Depreciation (35,000) (10,000) (25,000) (70,000) Segment margin $120,000 $ 40,000 $ (10,000) $150,000 Hickory's management is...
Structuring a Keep-or-Drop Product Line Problem with Complementary Effects Shown below is a segmented income statement...
Structuring a Keep-or-Drop Product Line Problem with Complementary Effects Shown below is a segmented income statement for Hickory Company's three wooden flooring product lines: Strip Plank Parquet Total Sales revenue $400,000 $200,000 $300,000 $900,000 Less: Variable expenses 225,000 120,000 250,000 595,000 Contribution margin $175,000 $ 80,000 $ 50,000 $305,000 Less direct fixed expenses: Machine rent (5,000) (20,000) (30,000) (55,000) Supervision (15,000) (10,000) (5,000) (30,000) Depreciation (35,000) (10,000) (25,000) (70,000) Segment margin $120,000 $ 40,000 $ (10,000) $150,000 Hickory's management is...
Case #4 Penna Company manufactures three product lines. The following operating data have been gathered for...
Case #4 Penna Company manufactures three product lines. The following operating data have been gathered for the most recent quarter: Caxton Tinta Bozze Total Sales $750,000 $300,000 $450,000 $1,500,000 Variable costs $450,000 $150,000 $300,000 $900,000 Contribution margin 300,000 150,000 150,000 600,000 Fixed costs Rent $37,500 $15,000 $22,500 $75,000 Depreciation $45,000 $18,000 $27,000 $90,000 Utilities $30,000 $7,500 $22,500 $60,000 Supervision $22,500 $7,500 $45,000 $75,000 Maintenance S22,500 $9,000 $13,500 $45,000 Administrative $45,000 $30,000 $75,000 $150,000 Total fixed costs 202,500 87,000 205,500 495,000...
Structuring a Keep-or-Drop Product Line Problem Shown below is a segmented income statement for Orzo Company's...
Structuring a Keep-or-Drop Product Line Problem Shown below is a segmented income statement for Orzo Company's three laminated flooring product lines: Strip Plank Parquet Total Sales revenue $400,000 $200,000 $300,000 $900,000 Less: Variable expenses 225,000 120,000 250,000 595,000 Contribution margin $175,000 $ 80,000 $ 50,000 $305,000 Less direct fixed expenses: Machine rent (5,000) (20,000) (50,000) (75,000) Supervision (15,000) (10,000) (20,000) (45,000) Depreciation (35,000) (10,000) (25,000) (70,000) Segment margin $120,000 $ 40,000 $ (45,000) $115,000 Orzo's management is deciding whether to...
Structuring a Keep-or-Drop Product Line Problem Shown below is a segmented income statement for Hickory Company's...
Structuring a Keep-or-Drop Product Line Problem Shown below is a segmented income statement for Hickory Company's three wooden flooring product lines: Strip Plank Parquet Total Sales revenue $400,000 $200,000 $300,000 $900,000 Less: Variable expenses 225,000 120,000 250,000 595,000 Contribution margin $175,000 $ 80,000 $ 50,000 $305,000 Less direct fixed expenses: Machine rent (5,000) (20,000) (50,000) (75,000) Supervision (15,000) (10,000) (20,000) (45,000) Depreciation (35,000) (10,000) (25,000) (70,000) Segment margin $120,000 $ 40,000 $ (45,000) $115,000 Hickory's management is deciding whether to...
The managers of Riverside Designs are considering dropping one of their product lines. The product line...
The managers of Riverside Designs are considering dropping one of their product lines. The product line typically has the following revenue and costs: Sales $125,000 Variable costs 85,000 Contribution margin 40,000 Fixed costs 45.000 Operating loss $ (5,000) If the product line is discontinued, $4,000 of the fixed costs would be avoided. Also, the freed-up capacity would generate $6,000 of additional contribution margin from the expansion of other product lines. If Riverside discontinues the product line, the effect on overall...
Shown below is a segmented income statement for Hickory Company's three wooden flooring product lines: Strip Plank Parquet Total Sales revenue $400,000 $200,000 $300,000 $900,000 Less: Variable expenses 225,000 120,000 250,000 595,000 Contribution margin $175,000 $ 80,000 $ 50,000 $305,000 Less direct fixed expenses: Machine rent (5,000) (20,000) (50,000) (75,000) Supervision (10,000) (20,000) (45,000) (15,000) (35,000) Depreciation (10,000) (25,000) (70,000) Segment margin $120,000 $ 40,000 $ (45,000) $115,000 Hickory's management is deciding whether to keep or drop the parquet product...
Multiple Choice Question 153 A company has three product lines, one of which reflects the following results: Sales Variable expenses Contribution margin Fixed expenses Net loss $184000 101000 83000 130000 $ (47000) If this product line is eliminated, 60% of the wed expenses can be eliminated and the other 40% will be located to other product lines. It management decides to eliminate this product line, the company's net income will increase by $5000 decrease by S5000 increase by 547000 decrease...
Case #4 Penna Company manufactures three product lines. The following operating data have been gathered for the most recent quarter: Caxton Tinta Bozze Total Sales $750,000 $300,000 $450,000 $1,500,000 Variable costs $450,000 $150,000 $300,000 $900,000 Contribution margin 300,000 150,000 150,000 600,000 Fixed costs Rent $37,500 $15,000 $22,500 $75,000 Depreciation $45,000 $18,000 $27,000 $90,000 Utilities $30,000 $7,500 $22,500 $60,000 Supervision $22,500 $7,500 $45,000 $75,000 Maintenance S22,500 $9,000 $13,500 $45,000 Administrative $45,000 $30,000 $75,000 $150,000 Total fixed costs 202,500 87,000 205,500 495,000...
The managers of Riverside Designs are considering dropping one of their product lines. The product line typically has the following revenue and costs: Sales $125,000 Variable costs 85,000 Contribution margin 40,000 Fixed costs 45.000 Operating loss $ (5,000) If the product line is discontinued, $4,000 of the fixed costs would be avoided. Also, the freed-up capacity would generate $6,000 of additional contribution margin from the expansion of other product lines. If Riverside discontinues the product line, the effect on overall...
Most questions answered within 3 hours.
-
In Netherland Dwarf rabbits, dwarf size is determined by allele
N, and normal-size by allele n....
asked 2 minutes from now -
During Heaton Company’s first two years of operations, it
reported absorption costing net operating income as...
asked 11 minutes ago -
Consider testing the
hypotheses:
H0: p = 0.56
H1: p > 0.56
where p is
the...
asked 14 minutes ago -
In a two-factor analysis of variance a main effect is defined as
____.
a. the unique...
asked 22 minutes ago -
A bank's loan officer rates applicants for credit. The ratings
are normally distributed with a mean...
asked 22 minutes ago -
Fill in the following information for Adipic Acid: molecular
weight, g or ml, mole, melting point,...
asked 27 minutes ago -
how
to use a for loop to iterate over the string below and print each
character...
asked 29 minutes ago -
Please type answer, Thanks.
Respond to the following in a minimum of 175
words:
Research industry...
asked 29 minutes ago -
Assume that all interest rates in the economy increase from 9
percent to 10 percent. Which...
asked 39 minutes ago -
Describe the function of a Change Control Board.
When calculating Planned Value (PV), what is the...
asked 45 minutes ago -
The customer help center in your company receives calls from
customers who need help with some...
asked 56 minutes ago -
A manufacturer wished to compare the wearing qualities of two
different types of automobile tires, A...
asked 54 minutes ago