Homework Answers
In the case where the segment has a positive contribution margin but has an operating loss than it will help to recover some of its Fixed cost. Hence dropping this type of segment will cause the company to have a decrease in total operating income.
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25. Explain why a segment with an operating loss can cause the company to have a decrease in total operating income...
Gion Company is considering eliminating its windows division, which reported an operating loss for the recent...
Gion Company is considering eliminating its windows division, which reported an operating loss for the recent year of $105,000. Division sales for the year were $1,110,000 and its variable costs were $975,000. The foed costs of the division were $220,000. If the windows division is dropped, 65% of the fixed costs allocated to it could be eliminated. The impact on Gion's operating income from eliminating this business segment would be: - Ο $7.200 decrease Ο $8,000 increase Ο $143,000 decrease...
Granfield Company is considering eliminating its backpack division, which reported an operating loss for the recent...
Granfield Company is considering eliminating its backpack division, which reported an operating loss for the recent year of $41,000. The division sales for the year were $941,000 and the variable costs were $465,000. The fixed costs of the division were $517,000. If the backpack division is dropped, 40% of the fixed costs allocated to that division could be eliminated. The impact on Granfield's operating income for eliminating this business segment would be: Multiple Choice O $269,200 increase O $476,000 decrease...
Explain why the income statement can also be called a "profit-and-loss statement." What exactly does the wo...
Explain why the income statement can also be called a "profit-and-loss statement." What exactly does the word balance mean in the title of the balance sheet? Why do we balance the two halves? Explain why the income statement can also be called a "profit-and-loss statement." (Select from the drop-down menus.) t h at the top and ends with In reviewing the income statement of a profitable company, one can see that it begins with at the bottom. Had there been...
Can an organization have net income yet still show a decrease in its cash balance? Why...
Can an organization have net income yet still show a decrease in its cash balance? Why might this occur? Provide at least two examples of situations that would cause this to happen.
Valdez Company is considering eliminating its kitchen division, which reported an operating loss of $53,000 for...
Valdez Company is considering eliminating its kitchen division, which reported an operating loss of $53,000 for the past year, Kitchen division sales for the year were $1,040,000, and its variable costs were $775,000. The fixed costs of the division were $318,000. If the kitchen division is dropped, 60% of the foxed costs allocated to it could be eliminated. The impact on Valdez's operating income from eliminating this business segment would be . Multiple Choice Ο $74,200 decrease Ο $265,000 increase...
Dropping or Retaining a Segment
Exercise 12-15 Dropping or Retaining a Segment [LO2]Boyle’s Home Center, a retailing company, has two departments, Bath and Kitchen. The company’s most recent monthly contribution format income statement follows:Department. . . . . . . . . . . . . . . . . . . . . . . . . Total . . . . . .Bath. . . . ……. .KitchenSales . . . . . . . . . . . . . . ....
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the...
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $4,000. The division sales for the year were $1,051,000 and the variable costs were $861,000. The fixed costs of the division were $194,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be: Multiple Choice $58,200 decrease $131,800 decrease $54,200...
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the...
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $4,000. The division sales for the year were $1,046,000 and the variable costs were $861,000. The fixed costs of the division were $189.000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be: Multiple Choice $56,700 decrease $128,300 decrease $52,700...
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the...
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $5,000. The division sales for the year were $1,059,000 and the variable costs were $862,000. The fixed costs of the division were $202,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be: Multiple Choice $60,600 decrease $136,400 decrease $55,600...
Members of the board of directors of Security System have received the following operating income data for the year end...
Members of the board of directors of Security System have received the following operating income data for the year ended May 31, 2018: E(Click the icon to view the operating income data.) Members of the board are surprised that the industrial systems product line is not profitable. They commission a study to determine whether the company should drop the line. Company accountants estimate that dropping industrial systems will decrease fixed cost of goods sold by $81,000 and decrease fixed selling...
Gion Company is considering eliminating its windows division, which reported an operating loss for the recent year of $105,000. Division sales for the year were $1,110,000 and its variable costs were $975,000. The foed costs of the division were $220,000. If the windows division is dropped, 65% of the fixed costs allocated to it could be eliminated. The impact on Gion's operating income from eliminating this business segment would be: - Ο $7.200 decrease Ο $8,000 increase Ο $143,000 decrease...
Granfield Company is considering eliminating its backpack division, which reported an operating loss for the recent year of $41,000. The division sales for the year were $941,000 and the variable costs were $465,000. The fixed costs of the division were $517,000. If the backpack division is dropped, 40% of the fixed costs allocated to that division could be eliminated. The impact on Granfield's operating income for eliminating this business segment would be: Multiple Choice O $269,200 increase O $476,000 decrease...
Explain why the income statement can also be called a "profit-and-loss statement." What exactly does the word balance mean in the title of the balance sheet? Why do we balance the two halves? Explain why the income statement can also be called a "profit-and-loss statement." (Select from the drop-down menus.) t h at the top and ends with In reviewing the income statement of a profitable company, one can see that it begins with at the bottom. Had there been...
Valdez Company is considering eliminating its kitchen division, which reported an operating loss of $53,000 for the past year, Kitchen division sales for the year were $1,040,000, and its variable costs were $775,000. The fixed costs of the division were $318,000. If the kitchen division is dropped, 60% of the foxed costs allocated to it could be eliminated. The impact on Valdez's operating income from eliminating this business segment would be . Multiple Choice Ο $74,200 decrease Ο $265,000 increase...
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $4,000. The division sales for the year were $1,051,000 and the variable costs were $861,000. The fixed costs of the division were $194,000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be: Multiple Choice $58,200 decrease $131,800 decrease $54,200...
Soar Incorporated is considering eliminating its mountain bike division, which reported an operating loss for the recent year of $4,000. The division sales for the year were $1,046,000 and the variable costs were $861,000. The fixed costs of the division were $189.000. If the mountain bike division is dropped, 30% of the fixed costs allocated to that division could be eliminated. The impact on operating income for eliminating this business segment would be: Multiple Choice $56,700 decrease $128,300 decrease $52,700...
Members of the board of directors of Security System have received the following operating income data for the year ended May 31, 2018: E(Click the icon to view the operating income data.) Members of the board are surprised that the industrial systems product line is not profitable. They commission a study to determine whether the company should drop the line. Company accountants estimate that dropping industrial systems will decrease fixed cost of goods sold by $81,000 and decrease fixed selling...
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