A segment of a company reports the following loss for the year. All $192,500 of its variable costs are avoidable, and $93,000 of its fixed costs are avoidable. Segment Income (Loss) Sales $ 275,000 Variable costs 192,500 Contribution margin 82,500 Fixed costs 101,000 Income (loss) (18,500) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be eliminated?
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A segment of a company reports the following loss for the year. All $192,500 of its variable costs are avoidable, and $93,000 of its fixed costs are avoidable.
Segment Income (Loss) | |
---|---|
Sales | $ 275,000 |
Variable costs | 192,500 |
Contribution margin | 82,500 |
Fixed costs | 101,000 |
Income (loss) | (18,500) |
(a) Compute the income increase or decrease from eliminating this segment.
(b) Should the segment be eliminated?
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- A segment has the following data: Sales $790000 Variable expenses 345000 Fixed expenses 550000 What will be the incremental effect on net income if this segment is eliminated, assuming the fixed expenses will be allocated to profitable segments? $345000 increase $445000 decrease Cannot be determined from the data provided $5750 decreaseDifferential AnalysisIn each of four independent cases, the amount of differential revenue or differential cost is as follows (parentheses indicate decreases): 1 2 3 4 Increases (decreases) in: Revenue $19,000 $0 ? ? Costs ? ? $(11,000) $0 For each case, determine the missing amount that would be necessary for the net differential amount to be: a. $10,000Use a negative signs with answers to reflect decreases. 1 2 3 4 Increases (decreases) in: Revenue $19,000 $0 Answer Answer Costs Answer Answer $(11,000) $0 b. ($7,000)Use a negative signs with answers to reflect decreases. 1 2 3 4 Increases (decreases) in: Revenue $19,000 $0 Answer Answer Costs Answer Answer $(11,000) $0Determining missing items in return and residual income computations Data are presented in the following table of returns on investment and residual incomes: Invested Assets Operating Income Return on Investment Minimum Return on Investment Minimum Acceptable Operating Income Residual Income $1,200,000 $198,000 (a) 12% (b) (c) $800,000 (d) (e) (f) $120,000 $40,000 $750,000 (g) 14% (h) $90,000 (i) $1,800,000 $441,000 (j) 15% (k) (l) Determine the missing items, identifying each item by the appropriate letter. Round your percentages to one decimal place. a. fill in the blank 1 % b. $fill in the blank 2 c. $fill in the blank 3 d. $fill in the blank 4 e. fill in the blank 5 % f. fill in the blank 6 % g. $fill in the blank 7 h. fill in the blank 8 % i. $fill in the blank 9 j. fill in the blank 10 % k. $fill in the blank 11 l. $fill in the…
- Determining missing items in return and residual income computations Data are presented in the following table of returns on investment and residual incomes: Invested Assets Operating Income Return on Investment Minimum Return on Investment Minimum Acceptable Operating Income Residual Income $1,200,000 $198,000 (a) 12% (b) (c) $800,000 (d) (e) (f) $120,000 $40,000 $750,000 (g) 14% (h) $90,000 (i) $1,800,000 $441,000 (j) 15% (k) (l) Determine the missing items, identifying each item by the appropriate letter. Round your percentages to one decimal place. a. % b. $ c. $ d. $ e. % f. % g. $ h. % i. $ j. % k. $ l. $Determining missing items in return and residual income computations Data for Uberto Company are presented in the following table of rates of return on investment and residual incomes: Invested Assets Income from Operations Return on Investment Minimum Return Minimum Acceptable Income from Operations Residual Income $925,000 $185,000 (a) 15% (b) (c) $775,000 (d) (e) (f) $93,000 $23,250 $450,000 (g) 18% (h) $58,500 (i) $610,000 $97,600 (j) 12% (k) (l) Determine the missing values, identifying each item by the appropriate letter. a. fill in the blank 1% b. $fill in the blank 2 c. $fill in the blank 3 d. $fill in the blank 4 e. fill in the blank 5% f. fill in the blank 6% g. $fill in the blank 7 h. fill in the blank 8% i. $fill in the blank 9 j. fill in the blank 10% k. $fill in the blank 11 l. $fill in the blank 12Determining missing items in return and residual income computations Data for Uberto Company are presented in the following table of returns on investment and residual incomes: Invested Assets Income from Operations Return on Investment Minimum Return Minimum Acceptable Income from Operations Residual Income $890,000 $231,400 (a) 15% (b) (c) $460,000 (d) (e) (f) $50,600 $23,000 $310,000 (g) 14% (h) $31,000 (i) $230,000 $48,300 (j) 12% (k) (l) Determine the missing values, identified by the letters above. For all amounts, round to the nearest whole number. a. % b. c. d. e. % f. % g. h. % i. j. % k. l.
- Determining missing items in return and residual income computations Data for Uberto Company are presented in the following table of returns on investment and residual incomes: Invested Assets Income from Operations Return on Investment Minimum Return Minimum Acceptable Income from Operations Residual Income $780,000 $187,200 (a) 13% (b) (c) $490,000 (d) (e) (f) $53,900 $24,500 $350,000 (g) 14% (h) $38,500 (i) $260,000 $52,000 (j) 12% (k) (l) Determine the missing values, identified by the letters above. For all amounts, round to the nearest whole number. a. fill in the blank 1% b. $fill in the blank 2 c. $fill in the blank 3 d. $fill in the blank 4 e. fill in the blank 5% f. fill in the blank 6% g. $fill in the blank 7 h. fill in the blank 8% i. $fill in the blank 9 j. fill in the blank 10% k.…Understanding CVP relationships Calculate the missing amounts for each of thefollowing firms: Contribution Variable Margin Fixed OperatingSales Costs Ratio Costs Income (Loss)Firm A $320,000 ? 32% ? $38,300Firm B ? $465,050 ? $118,000 71,950Firm C 134,000 ? 26% 36,700 ?Firm D ? 59,000 20% ? (4,920)Calculate the residual income with the following data: Controllable margin $202,596 Minimum Rate of Return 11% Average Operating Assets $3,092,235 Round to the nearest whole dollar, no decimal places. Note: Controllable margin is the same as net income for a segment with control over the costs. Minimum rate of return is the same as the cost of capital.
- Determining missing items in return and residual income computations Data for Uberto Company are presented in the following table of rates of return on investment and residual incomes: Invested Assets Income from Operations Return on Investment Minimum Return Minimum Acceptable Income from Operations Residual Income $980,000 $225,400 (a) 13% (b) (c) $600,000 (d) (e) (f) $72,000 $24,000 $320,000 (g) 14% (h) $35,200 (i) $240,000 $45,600 (j) 11% (k) (l) Determine the missing values, identified by the letters above. For all amounts, round to the nearest whole number.Determining missing items in return and residual income computations Data are presented in the following table of returns on investment and residual incomes: Invested Assets Operating Income Return on Investment Minimum Return on Investment Minimum Acceptable Operating Income Residual Income $870,000 $200,100 (a) 13% (b) (c) $520,000 (d) (e) (f) $57,200 $26,000 $340,000 (g) 14% (h) $37,400 (i) $260,000 $49,400 (j) 11% (k) (l)Determining missing items in return and residual income computations Data for Uberto Company are presented in the following table of rates of return on investment and residual incomes: Invested Assets Income from Operations Return on Investment Minimum Return Minimum Acceptable Income from Operations Residual Income $950,000 $228,000 (a) 13% (b) (c) $550,000 (d) (e) (f) $60,500 $27,500 $350,000 (g) 14% (h) $38,500 (i) $260,000 $52,000 (j) 12% (k) (l) Determine the missing values, identified by the letters above. For all amounts, round to the nearest whole number. a. fill in the blank 1% b. $fill in the blank 2 c. $fill in the blank 3 d. $fill in the blank 4 e. fill in the blank 5% f. fill in the blank 6% g. $fill in the blank 7 h. fill in the blank 8% i. $fill in the blank 9 j. fill in the blank 10% k. $fill in the…