A guitar manufacturer is considering eliminating its electric guitar division because its $90,790 expenses are higher than its $84,030 sales. The company reports the following expenses for this division. Avoidable Expenses Unavoidable Expenses Cost of goods sold $ 63,000 Direct expenses 9,250 $ 2,950 Indirect expenses 1,010 2,150 Service department costs 10,400 2,030 Should the division be eliminated? (Any loss amount should be indicated with minus sign.)

A guitar manufacturer is considering eliminating its electric guitar division because its $90,790 expenses are higher than its $84,030 sales. The company reports the following expenses for this division. Avoidable Expenses Unavoidable Expenses Cost of goods sold $ 63,000 Direct expenses 9,250 $ 2,950 Indirect expenses 1,010 2,150 Service department costs 10,400 2,030 Should the division be eliminated? (Any loss amount should be indicated with minus sign.)

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter25: Departmental Accounting

Section: Chapter Questions

Problem 6SEB

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Little Cory Corporation is considering dropping product G41O. Data from the company's accounting system appear below: All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $117,000 of the fixed manufacturing expenses and $46,000 of the fixed selling and administrative expenses are avoidable if product G41O is discontinued.Required:a. According to the company's accounting system, what is the net operating income earned by product G41O? b. What would be the effect on the company's overall net operating income of dropping product G41O? Should the product be dropped? There is not a word length requirement for this question; however, you must show your work. sales 450,000 variable expenses 185,000 fixesd manufacturing expenses 149,000 fixed selling and administered expenses 113,000
____ 1.Which of the following is a responsibility center that incurs expenses, generates revenues, and is responsible for generating a return on assets? a. Cost center b. Revenue center c. Profit center d. Investment center ____ 2.Which one of the following is the most useful measure for evaluating a manager's performance in controlling revenues and costs in a profit center? a. Contribution margin b. Contribution net income c. Contribution gross profit d. Controllable margin ____ 3.Hanover Corporation desires to earn target net income of $42,000. The selling price per unit is $18, unit variable cost is $5.60, and total fixed costs are $123,912. How many units must the company sell to earn its target net income? a. 13,380 b. 9,993 c. 3,387 d. 9,217 ____ 4.Remark…
Crane Company's Division B recorded sales of $35,800, variable cost of goods sold of $24,800, variable selling expenses of $9,600, and fixed costs of $6,200, creating a loss from operations of $4,800. Determine the differential income or loss from the sales of Division B. Enter a loss as a negative number.$fill in the blank 1 Should this Division B be discontinued? (If the answer to above part is zero, select "No".)
Please Do not Give image format Allocate manufacturing, ordering, and selling costs to the two customer groups by using an activity-based management (ABM) allocation basis. Calculate the net profit before tax (NPBT) for each customer group using an ABM allocation basis.
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	Avoidable Expenses		Unavoidable Expenses
Cost of goods sold	$	63,000
Direct expenses		9,250		$	2,950
Indirect expenses		1,010			2,150
Service department costs		10,400			2,030