Homework Help is Here – Start Your Trial Now!
Business
Accounting
Annie's Homemade is deciding whether to retain or drop a 700-square feet satellite shop location. The company makes the ice cream sold at the satellite location at its larger main shop location. Twice a month the company transports ice cream from its main shop to the satellite location. The company gathered the following additional information to assist in making the decision: Annual sales at the satellite location Ingredient costs as a percent of sales Monthly rent at satellite location (the lease is cancelable). Average monthly utility expense at satellite location. Part-time store managers' combined annual wages at satellite location Annual hourly wages paid to additional employees at satellite location. Annual hours spent by salaried managers at the main shop location supporting the satellite location i Other annual expenses: Annual depreciation expense on satellite store's equipment (no salvage value) Annual pickup truck and cargo trailer depreciation, insurance, registration, and vehicle taxi Annual manufacturing overhead at main shop location (e.g., equipment depreciation, rent, utilities, insurance, etc.) The salaried managers working at the main shop will be retained whether the satellite store closes or remains open. The part-time store managers and additional hourly employees working at the satellite location would not be retained if it closes. Required: 1. What is the financial advantage (disadvantage) of closing the satellite shop location (on an annual basis)? The financial advantage (disadvantage) is 26,800 $ $ 130,000 $ 2,200 $ 200 $ 35,000 $ 32,000 600 30% $ 5,000 $ 16,000 $ 55,000

Annie's Homemade is deciding whether to retain or drop a 700-square feet satellite shop location. The company makes the ice cream sold at the satellite location at its larger main shop location. Twice a month the company transports ice cream from its main shop to the satellite location. The company gathered the following additional information to assist in making the decision: Annual sales at the satellite location Ingredient costs as a percent of sales Monthly rent at satellite location (the lease is cancelable). Average monthly utility expense at satellite location. Part-time store managers' combined annual wages at satellite location Annual hourly wages paid to additional employees at satellite location. Annual hours spent by salaried managers at the main shop location supporting the satellite location i Other annual expenses: Annual depreciation expense on satellite store's equipment (no salvage value) Annual pickup truck and cargo trailer depreciation, insurance, registration, and vehicle taxi Annual manufacturing overhead at main shop location (e.g., equipment depreciation, rent, utilities, insurance, etc.) The salaried managers working at the main shop will be retained whether the satellite store closes or remains open. The part-time store managers and additional hourly employees working at the satellite location would not be retained if it closes. Required: 1. What is the financial advantage (disadvantage) of closing the satellite shop location (on an annual basis)? The financial advantage (disadvantage) is 26,800 $ $ 130,000 $ 2,200 $ 200 $ 35,000 $ 32,000 600 30% $ 5,000 $ 16,000 $ 55,000

Essentials Of Business Analytics
Essentials Of Business Analytics
1st Edition
ISBN:9781285187273
Author:Camm, Jeff.
Publisher:Camm, Jeff.
Chapter11: Monte Carlo Simulation
Section: Chapter Questions
Problem 10P
See similar textbooks
icon
Related questions
Question
Annie's Homemade is deciding whether to retain or drop a 700-square feet satellite shop location. The company makes the ice cream sold at the satellite location at its larger main shop location. Twice a month the company transports ice cream from its main shop to the satellite location. The company gathered the following additional information to assist in making the decision: Annual sales at the satellite location i Ingredient costs as a percent of sales Monthly rent at satellite location (the lease is cancelable). Average monthly utility expense at satellite location. Part-time store managers' combined annual wages at satellite location Annual hourly wages paid to additional employees at satellite location Annual hours spent by salaried managers at the main shop location supporting the satellite location i Other annual expenses: Annual depreciation expense on satellite store's equipment (no salvage value) Annual pickup truck and cargo trailer depreciation, insurance, registration, and vehicle tax Annual manufacturing overhead at main shop location (e.g., equipment depreciation, rent, utilities, insurance, etc.) The salaried managers working at the main shop will be retained whether the satellite store closes or remains open. The part-time store managers and additional hourly employees working at the satellite location would not be retained if it closes. Required: 1. What is the financial advantage (disadvantage) of closing the satellite shop location (on an annual basis)? The financial advantage (disadvantage) is 26,800 $ $ 130,000 30% $ 2,200 $ 200 $ 36,000 $ 32,000 600 $5,000 $ 16,000 $ 55,000
Transcribed Image Text:Annie's Homemade is deciding whether to retain or drop a 700-square feet satellite shop location. The company makes the ice cream sold at the satellite location at its larger main shop location. Twice a month the company transports ice cream from its main shop to the satellite location. The company gathered the following additional information to assist in making the decision: Annual sales at the satellite location i Ingredient costs as a percent of sales Monthly rent at satellite location (the lease is cancelable). Average monthly utility expense at satellite location. Part-time store managers' combined annual wages at satellite location Annual hourly wages paid to additional employees at satellite location Annual hours spent by salaried managers at the main shop location supporting the satellite location i Other annual expenses: Annual depreciation expense on satellite store's equipment (no salvage value) Annual pickup truck and cargo trailer depreciation, insurance, registration, and vehicle tax Annual manufacturing overhead at main shop location (e.g., equipment depreciation, rent, utilities, insurance, etc.) The salaried managers working at the main shop will be retained whether the satellite store closes or remains open. The part-time store managers and additional hourly employees working at the satellite location would not be retained if it closes. Required: 1. What is the financial advantage (disadvantage) of closing the satellite shop location (on an annual basis)? The financial advantage (disadvantage) is 26,800 $ $ 130,000 30% $ 2,200 $ 200 $ 36,000 $ 32,000 600 $5,000 $ 16,000 $ 55,000
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 3 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Essentials Of Business Analytics
Essentials Of Business Analytics
Statistics
ISBN:
9781285187273
Author:
Camm, Jeff.
Publisher:
Cengage Learning,
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Financial Accounting: The Impact on Decision Make…
Financial Accounting: The Impact on Decision Make…
Accounting
ISBN:
9781305654174
Author:
Gary A. Porter, Curtis L. Norton
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Financial Accounting Intro Concepts Meth/Uses
Financial Accounting Intro Concepts Meth/Uses
Finance
ISBN:
9781285595047
Author:
Weil
Publisher:
Cengage
SEE MORE TEXTBOOKS