Assume a retailing company has two departments-Department A and Department B. The company's most recent contribution format income statement follows: Total Department A Department B Sales $ 800,000 $ 350,000 $ 450,000 Variable expenses 320,000 120,000 200,000 Contribution margin 480,000 230,000 250,000 Fixed expenses 400,000 140,000 260,000 Net operating income (loss) $ 80,000 $ 90,000 $ (10,000) The company says that $120,000 of the fixed expenses being charged to Department B are sunk costs or allocated costs that will continue if the segment discontinued the sales in Department A will drop by 12%. What discontinued. However, if Department B is the financial advantage (disadvantage) of discontinuing Department B?
Q: $332,500 Segment margin $537,500 $550,000 ($12,500) Common fixed expenses $370,000 $210,000…
A: ompany has the following operations: Given Traceable fixed costs of store 2 = $332500 Unavoidable…
Q: Ultimo Company operates three production departments as profit centers. The following Information is…
A: Overhead are those costs that cannot be directly attributed to a unit of product.theae can be…
Q: Piedmont Company segments its business into two regions—North and South. The company prepared the…
A: Calculate the company BEP of sales in $ as follows: 1. Calculate the company contribution margin…
Q: Northern Stores is a retailer in the upper Midwest. The most recent monthly income statement for…
A: Marginal costing decision technique helps the management to take right decision whether to continue…
Q: The monthly income statement for Jordan Stores is given below: 1st Branch 2nd Branch…
A: Segment Reporting: When a company's operational segments are reported in the financial statements…
Q: In the fiscal year just concluded, the University Shop reported net income of. P4,000,000 on sales…
A: Fixed costs are those costs which do not change with change in level of activity. Fixed costs =…
Q: Sales revenue for XYZ Company is $1,000,000. The cost of goods sold is $450,000 and the operating…
A: Thus, the net operating income is $300,000.
Q: Rundle Company operates three segments. Income statements for the segments imply that profitability…
A: Incremental analysis is analysis of change in incremental income or loss due to availability of…
Q: A company has three product lines, one of which reflects the following results: Sales…
A: Avoidable fixed expenses = Total fixed expenses x 60% = $130,000 x 60% = $78,000
Q: A company provided the following results from It's operations: Total Sales $400,000 Variable…
A: Lets understand the basics. Contribution margin is a margin generated from sales. Contribution…
Q: i Requlred Informatlon The following information applies to the questions displayed below]…
A: Asset turnover ratio in the business shows efficiency of the assets of the business in generating…
Q: If the company eliminates the Western Division and the Eastern Division sales increase by 10% as a…
A: Given in the question: There are two divisions of the company which are the western division and…
Q: Advertising expense $180,000 per quarter Sales commissions 5% of sales Shipping expense $40,000 per…
A: Contribution margin income statement shows the contribution margin at every level. Like at…
Q: During Heaton Company’s first two years of operations, it reported absorption costing net operating…
A: 1. Variable costing: This is a costing method that includes variable manufacturing costs to compute…
Q: The monthly income statement for Jordan Stores is given below: 1st Branch 2nd Branch Total…
A: In the given question, if 1st branch is eliminated, all the revenues and costs associated with the…
Q: Assume a company reported the following results: Sales Variable expenses Contribution margin Fixed…
A: Actual income=operating assets×Minimum return
Q: Tabouk’s Manufacturing Company has two divisions: Garden Division and Farm Division. The following…
A: Breakeven point refers to that point of sale where the company neither earns any profit nor suffers…
Q: Assume that more than one product is being sold in each of the four following case situations: Case…
A: Formula: Contribution margin = sales - variable expenses Deduction of variable expenses from sales…
Q: Sales revenue for XYZ Company is $1,000,000. The cost of goods sold is $450,000 and the operating…
A: The following calculations are done in the records of XYZ Company to evaluate the residual income of…
Q: During Heaton Company’s first two years of operations, it reported absorption costing net operating…
A: Year 1 Year2 Beg Stock - 5,000 Units Produced…
Q: During Heaton Company’s first two years of operations, the company reported absorption costing net…
A: Absorption Costing: Absorption costing identifies the cost that is absorbed while manufacturing and…
Q: Inc. has a shoes and a shirts division. The company reported the following segmented income…
A: Contribution margin is computed by deducting the variable expenses from the sales revenue.…
Q: Required information [The following information applies to the questions displayed below.]…
A:
Q: The condensed income statement for a PiggyPink Ltd. for the past year is as follows:…
A: A B C Total Sales $350,000 $210,000 $340,000 $900,000 Costs:…
Q: During Heaton Company’s first two years of operations, it reported absorption costing net operating…
A: The term "variable costing" refers to a method of assigning only variable costs to products. This…
Q: Forchen, Inc., provided the following information for two of its divisions for last year: Small…
A: Margin = Operating income/Sales = $2,000,000/$34,670,000 = 5.77%
Q: Develop a profit-and-loss statement for the Westgate division of North Industries. This division…
A: Break-even sale is the amount of the sales at which all the revenues generated are equal to the…
Q: Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for…
A: Income statement: It can be defined as one of the company’s financial statements that shows all the…
Q: Piedmont Company segments its business into two regions—North and South. The company prepared the…
A: Break even point is the level of sales at which the company earns no profits and incurs no losses…
Q: Rings Company has three product lines, A, B, and C. The following financial information is…
A: Pre Tax Operating Income (if Product Line C is Continued) = $15,500 + $31,500 - $950 = $46,050 Pre…
Q: 7. Boone Corporation's income statement for the most recent month is given below. Company Store G…
A: Under cost volume profit relationship, it is analysed that how sales and profit of the business will…
Q: Assume a company with two divisions (A and B) prepared the following segmented income statement:…
A: Break even is the point at which an entity is just recovering its costs from the revenues but not…
Q: For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in…
A: Contribution Margin ratio - This ratio shows the sum of the amount that is available to cover fixed…
Q: Assume a retailing company has two departments-Department A and Department B. The company's most…
A: Calculation of Net Income (loss) if Department A is discontinued If Department A is…
Q: Ilas tWo departments-Home and Garden. The company's most recent contribution format income statement…
A: Solution: Profit increase (decrease) from discontinuation of a division is based on the margin lost…
Q: Whirly Corporation’s most recent income statement is shown below:Total Per UnitSales (10,000 units)…
A: Contribution Margin: The process or theory which is used to judge the benefit given by each unit of…
Q: Suresh Co. expects its five departments to yield the following income for next year. Dept. P $56,000…
A: Departmental income statement are the statement prepared to know the performance of the departments…
Q: Required information [The following information applies to the questions displayed below.]…
A: Net operating income from investment = Sales x contribution margin ratio - fixed expenses =…
Q: Kyonggi Machine Corporation in Suwon reports the following operating results for the month of June…
A: The break even sales units are the sales where business earns no profit no loss.
Q: Diamond Company has three product lines, A, B, and C. The following financial information is…
A: The effect can be measured as the difference between contribution margin and avoidable cost.
Q: Noventis Corporation prepared the following estimates for the four quarters of the current year:…
A: (1) The table below shows the statement of net income for each quarter of the year:
Q: Wyrich Corporation has two divisions: Blue Division and Gold Division. The following report is for…
A: Break even Sales =Fixed costs x SalesSales - Variable Costs
Q: Home Sweet Home, a garden furniture company, has two departments: Decks and Pergolas. A recent…
A: Operating income: Income statement reports revenues and expenses from business operations, and the…
Q: VW Enterprises operates three product lines. The most recent product line (division) income…
A: Decision Making - It is the process of making decision by identifying different choices, gathering…
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- Division A of Kern Co. has sales of $350,000, cost of goods sold of $200,000, operating expenses of $30,000, and invested assets of $600000. What is the return on investment for Division A? A. 20% B. 25% C. 33% D. 40%please dont provide answer in image format thank you Assume a retailing company has two departments—Department A and Department B. The company’s most recent contribution format income statement follows: Total Department A Department B Sales $ 800,000 $ 350,000 $ 450,000 Variable expenses 350,000 250,000 100,000 Contribution margin 450,000 100,000 350,000 Fixed expenses 400,000 140,000 260,000 Net operating income (loss) $ 50,000 $ (40,000) $ 90,000 The company says that $60,000 of the fixed expenses being charged to Department A are sunk costs or allocated costs that will continue if the segment is discontinued. However, if Department A is discontinued the sales in Department B will drop by 18%. What is the financial advantage (disadvantage) of discontinuing Department A?V. A company’s contribution format income statement for the previous follows: AmountSales P300,000Variable expenses 120,000Contribution margin 180,000Fixed expenses 108,000Net operating income P72,000 Required:a. Compute the company’s degree of operating leverage. b. Using the computed degree of operating leverage, estimate the effect on net operating income of a 5% increase in sales. c. Prepare an income statement using contribution format to verify your answer in (b)
- The following data relates to Campus Goods Inc:  Required: Based on the above data determine the following: 8A. Cost of Goods Sold in $ is ___________. 250,000 100,000 150,000 220,000 unanswered 8B. Gross Profit in $ and % is ___________ and ___________ respectively. 250,000 and 20% 180,0000 and 40% 180,000 and 45% 220,000 and 45% unanswered 8C. Operating expenses is ___________. 100,000 150,000 200,000 120,000 unanswered 8D. Operating profit in $ is ___________. 55,000 65,000 80,000 70,000Answer and solution please. Thank you! Consider the following portion of a segmented income statement for the year just ended. Assume that thefixed expenses of Division X include P30,000 of direct expenses and that the discontinuance of the departmentwill not affect the sales of the other departments nor reduce the common expenses:Net sales P100,000Variable manufacturing costs 60,000Gross profit P 40,000Fixed expenses (direct and allocated) 50,000Loss from operations P (10,000)What would be the effect on the firm’s operating income if Division X were discontinued?a. P10,000 increase b. P40,000 decrease c. P100,000 decrease d. P10,000 decreaseYKQOUC251 Corporation has two departments, Toys and Candy. The company's most recent monthly contribution format income statement follows: Sales Variable expenses Contribution Margin Fixed Expenses Net operating income (loss) Total Candy. $4,200,000 $3,000,000 $1,200,000 2,000,000 1,500,000 500,000 2,200,000 1,500,000 700,000 2,200,000 1,300,000 900,000 200,000 (200,000) 0 Department Toys A YKQOUC251's study indicates that $300,000 of the fixed expenses being charged to the Candy Department are sunk costs or allocated costs that will continue even if the Cand is dropped. In addition, the elimination of the Candy Department will result in a 20% decrease in the sales of the Toys Department. Q: If the Candy Department is dropped, what will be the effect on the net operating income of the YKQOUC251 Corporation as a whole?
- Financial information is presented below: Operating expenses $ 40,000 Sales revenue 200,000 Cost of goods sold 150,000 Gross profit would be Group of answer choices $160,000. $ 40,000. $ 50,000. $ 10,000.Use the following information (in thousands):Service Revenue¥1,600,000 Income from continuing operations200,000 Net Income180,000 Income from operations440,000 Selling & administrative expenses1,000,000 Income before income tax400,000Determine the amount of other income and expenseDJH Enterprises has 3 departments. Operating results for 2019 are as follows: Department 1 Department 2 Department 3 Sales $837,500 $402,500 $1,070,000 Variable Costs 556,250 358,750 752,500 Contribution Margin $281,250 $43,750 $317,500 Direct fixed expenses $150,000 $33,750 $203,750 Common fixed expenses 93,750 37,500 117,500 Total fixed expenses $243,750 $71,250 $321,250 Operating income (loss) $37,500 $(27,500) $(3,750) DJH is considering eliminating the departments that show losses. Assume that the direct fixed expenses could be avoided if the department is eliminated. What effect would elimination of Department 3 have on DJH’s total operating income? Select one: a. It would decrease total operating income by $113,750. b. It would decrease total operating income by $317,500. c. None of these options are correct. d. It would increase total operating income by $117,500. e. It would decrease total operating income by $3,750.
- Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented income statement as shown: Total Company North South Sales $ 825,000 $ 550,000 $ 275,000 Variable expenses 495,000 385,000 110,000 Contribution margin 330,000 165,000 165,000 Traceable fixed expenses 156,000 78,000 78,000 Segment margin 174,000 $ 87,000 $ 87,000 Common fixed expenses 69,000 Net operating income $ 105,000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the North region. 3. Compute the break-even point in dollar sales for the South region. (For all requirements, round your intermediate calculations to 2 decimal places. Round your final answers to the nearest dollar.) 1. Dollar sales for company to break-even 2. Dollar sales for North…Prepare the Pro-Forma Statement of Financial Position for the year ending 31 December 2023 INFORMATIONSibiya ProjectsStatement of Comprehensive Income for the year ended 31 December 2022 RSales 10 000 000Cost of sales (5 750 000)Gross profit 4 250 000Variable, selling and administrative costs (1 500 000)Fixed selling and administrative costs (500 000)Net profit 2 250 000 Statement of Financial Position for the year ended 31 December 2022ASSETS RNon-current assets 800 000Property, plant and equipment 800 000 Current assets 3 400 000Inventories 1 600 000Accounts receivable 600 000Cash 1 200 000TOTAL ASSETS 4 200 000 EQUITY AND LIABILITIESEquity 3 760 000 Current liabilities 440 000Accounts payable 440 000TOTAL ASSETS AND LIABILITIES 4 200 000 Additional informationA. The sales budget for 2023 is as follows:First Quarter Second Quarter Third Quarter Fourth QuarterR2 625 000 R2 750 000 R2 875 000 R2 750 000 B. 90% of sales is collected in the quarter of the sale and 10% in the quarter…Buckley Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. BUCKLEY COMPANY Income Statements for Year 2 Segment A B C Sales $ 330,000 $ 480,000 $ 500,000 Cost of goods sold (242,000 ) (184,000 ) (190,000 ) Sales commissions (30,000 ) (44,000 ) (44,000 ) Contribution margin 58,000 252,000 266,000 General fixed operating expenses (allocation of president’s salary) (92,000 ) (92,000 ) (92,000 ) Advertising expense (specific to individual divisions) (6,000 ) (20,000 ) 0 Net income (loss) $ (40,000 ) $ 140,000 $ 174,000 Required Prepare a schedule of relevant sales and costs for Segment A. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. Options for required A table are: Advertising…