(1) if the scarve line is eliminated we will prepare incremental analysis and determine whether the line should be continued or eliminated.
continue | eliminate | Increase(decrease) in net income if eliminated | |
sales | $400,000 | 0 | ($400,000) |
variable costs | $310,000 | 0 | $310,000 |
contribution margin | $90,000 [400000-310000] | 0 | ($90,000) |
fixed cost | $120,000 | $20,000 (will continue to occur) | $100,000[120000-20000] |
Net income | ($30,000) | ($20,000) | $10,000 |
Thus, if the line is eliminated it would increase income by $10,000
hence, company should eliminate the hats and scarves line.
Lambert, Inc. manufactures several types of accessories. For the year, the knit hats and scarves line...
Gator Corporation manufactures several types of accessories. For
the year, the gloves and mittens line had sales of $482,000,
variable expenses of $365,000, and fixed expenses of $141,000.
Therefore, the gloves and mittens line had a net loss of $24,000.
If Gator eliminates the line, $44,000 of fixed costs will remain.
Prepare an analysis showing whether the company should eliminate
the gloves and mittens line
Continue
Eliminate
Net Income
Increase (Decrease)
Sales
$
$
$
Variable costs
Contribution margin
Fixed...
Cullumber Corporation manufactures several types of accessories.
For the year, the gloves and mittens line had sales of $495,000,
variable expenses of $363,000, and fixed expenses of $148,000.
Therefore, the gloves and mittens line had a net loss of $16,000.
If Cullumber eliminates the line, $39,000 of fixed costs will
remain. Prepare an analysis showing whether the company should
eliminate the gloves and mittens line. (Enter negative
amounts using either a negative sign preceding the number e.g. -45
or parentheses...
Do It! Review 20-6 Gator Corporation manufactures several types of accessories. For the year, the gloves and mittens line had sales of $480,000, variable expenses of $364,000, and fixed expenses of $150,000. Therefore, the gloves and mittens line had a net loss of $34,000. If Gator eliminates the line, $41,000 of fixed costs will remain. Prepare an analysis showing whether the company should eliminate the gloves and mittens line. (Enter negative amounts using either a negative sign preceding the number...
Lisah, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $10,000 from sales $200,000, variable costs $180,000, and fixed costs $30,000. If the Big Bart line is eliminated, $20,000 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Continue Eliminate Net Income Increase (Decrease) Sales...
E7.2 (LO 2), AN Gruden Company produces golf discs which it normally sells to retailers for S7 each. The cost of manufacturing 20,000 golf discs is: Materials Labor Variable overhead Fixed overhead Total $ 10,000 30,000 20.000 40,000 $100,000 Gruden also incurs 5% sales commission ($0.35) on each disc sold. McGee Corporation offers Gruden $4.80 per disc for 5,000 discs. McGee would sell the discs under its own brand name in foreign markets not yet served by Gruden. If Gruden accepts the offer,...
Grouper, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $5,700 from sales $201,000, variable costs $176,000, and fixed costs $30,700. If the Big Bart line is eliminated, $20,000 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Continue Eliminate Net Income Increase (Decrease) Sales...
Lisah, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $5,000 from sales $199,000, variable costs $175,000, and fixed costs $29,000. If the Big Bart line is eliminated, $20,000 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Continue Eliminate Net Income Increase (Decrease) Sales...
Lisah, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $5,500 from sales $200,000, variable costs $176,000, and fixed costs $29,500. If the Big Bart line is eliminated, $20,100 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Continue Eliminate Net Income Increase (Decrease) Sales...
Concord, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $4,900 from sales $200,000, variable costs $175,000, and fixed costs $29,900. If the Big Bart line is eliminated, $19,400 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Continue Eliminate Net Income Increase (Decrease) Sales...
Lisah, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss of $6,600 from sales $200,000, variable costs $176,000, and fixed costs $30,600. If the Big Bart line is eliminated, $20,600 of fixed costs will remain. Prepare an analysis showing whether the Big Bart line should be eliminated. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Continue Eliminate Net Income Increase (Decrease) Sales...