Please give correct answer with explanation . Contribution margin income statement data for the most recent year follow:TotalCat FoodDog Food$85,000$40,000$45,000$52,000$(7,000)Sales revenueVariable expensesContribution marginFixed expensesOperating income (loss)$385,000$205,000$180,000$102,000$78,000$300,000$165,000$135,000$50,000$85,000Assuming the Dog food line is discontinued, and all fixed costs will go away, how will operating income be affected?GEXEOA. Decrease $7,000O B. Decrease $45,000OC. Increase $45,000OD. Increase $7,000

Total operating income with Dog food line is given at $78,000. If the Dog food line is discontinued,…

Contribution margin income statement data for the most recent year follow: Total Cat Food Dog Food $85,000 $40,000 $45,000 $52,000 S(7,000) Sales revenue Variable expenses Contribution margin Fixed expenses $385,000 $205,000 $180,000 $102,000 $78,000 $300,000 $165,000 $135,000 $50,000 $85,000 Operating income (loss) Assuming the Dog food line is discontinued, and all fixed costs will go away, how will operating income be affected? OA Decrease $7,000 OB. Decrease S45,000 OC. Increase $45,000 OD. Increase $7,000

Contribution margin income statement data for the most recent year follow: Total Cat Food Dog Food $85,000 $40,000 $45,000 $52,000 S(7,000) Sales revenue Variable expenses Contribution margin Fixed expenses $385,000 $205,000 $180,000 $102,000 $78,000 $300,000 $165,000 $135,000 $50,000 $85,000 Operating income (loss) Assuming the Dog food line is discontinued, and all fixed costs will go away, how will operating income be affected? OA Decrease $7,000 OB. Decrease S45,000 OC. Increase $45,000 OD. Increase $7,000

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter6: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 10E: Contribution margin and contribution margin ratio For a recent year, McDonalds (MCD) company-owned...

See similar textbooks

Similar questions

Whirly Corporation’s most recent income statement is shown below:Total Per UnitSales (10,000 units) ..................... $350,000 $35.00Variable expenses ....................... 200,000 20.00Contribution margin ..................... 150,000 $15.00Fixed expenses ........................... 135,000Net operating income .................. $ 15,000Required:Prepare a new contribution format income statement under each of the following conditions (consider eachcase independently):1. The sales volume increases by 100 units.2. The sales volume decreases by 100 units.3. The sales volume is 9,000 units.
*CAN YOU ANSWER PARTS 4-7* The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 992,000 $ 49.60 Variable expenses 595,200 29.76 Contribution margin 396,800 19.84 Fixed expenses 318,800 15.94 Net operating income 78,000 3.90 Income taxes @ 40% 31,200 1.56 Net income $ 46,800 $ 2.34 The company had average operating assets of $492,000 during the year. Required: 1. Compute the company’s return on investment (ROI) for the period using the ROI formula stated in terms of margin and turnover. For each of the following questions, indicate whether the margin and turnover will increase, decrease, or remain unchanged as a result of the events described, and then compute the new ROI figure. Consider each question separately, starting in each case from the data used to compute the original ROI in (1) above. 2. Using Lean Production, the company is able to reduce the average level of…
The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 4,000,000 $ 80.00 Variable expenses 2,800,000 56.00 Contribution margin 1,200,000 24.00 Fixed expenses 840,000 16.80 Net operating income 360,000 7.20 Income taxes @ 30% 108,000 2.16 Net income $ 252,000 $ 5.04 The company had average operating assets of $2,000,000 during the year. At the beginning of the year, the company uses $200,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock Effect Margin ____ % ____ Turnover ____ ____ ROI ____ % ____
The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 4,000,000 $ 80.00 Variable expenses 2,800,000 56.00 Contribution margin 1,200,000 24.00 Fixed expenses 840,000 16.80 Net operating income 360,000 7.20 Income taxes @ 30% 108,000 2.16 Net income $ 252,000 $ 5.04 The company had average operating assets of $2,000,000 during the year. At the beginning of the year, the company uses $200,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock At the beginning of the year, the company uses $200,000 of cash (received on accounts receivable) to repurchase and retire some of its common stock. (Round your intermediate calculations and final answers to 2 decimal places.) Effect Margin 6.30selected answer incorrect % not attempted Turnover 2.00selected answer incorrect not attempted ROI 12.60selected…
The contribution format income statement for Huerra Company for last year is given below: Total Unit Sales $ 4,000,000 $ 80.00 Variable expenses 2,800,000 56.00 Contribution margin 1,200,000 24.00 Fixed expenses 840,000 16.80 Net operating income 360,000 7.20 Income taxes @ 30% 108,000 2.16 Net income $ 252,000 $ 5.04 The company had average operating assets of $2,000,000 during the year. 4. The company issues bonds and uses the proceeds to purchase machinery and equipment that increases average operating assets by $500,000. Interest on the bonds is $60,000 per year. Sales remain unchanged. The new, more efficient equipment reduces production costs by $20,000 per year. 5. As a result of a more intense effort by salespeople, sales are increased by 20%; operating assets remain unchanged. 6. At the beginning of the year, obsolete inventory carried on the books at a cost of $40,000 is scrapped and written off as a loss. 7. At the beginning…
Assume that projected revenue for 2018 is 1,058,949. Also assume the following projected 2018 costs in each of the cost categories from question one: Packaged (Cans & Bottles) $140,847 Kegs $65,238 Shrinkage/WIP Loss $42,000 Contract Labor $9,000 Direct Labor $240,000 Freight $18,000 Consumer Advertising $30,000 Trade Promotion $30,000 Sales Promotion $18,000 Salaries & Benefits $180,000 Given these costs, compute Shannon’s projected contribution in dollars.
Shown as follows is a segmented income statement for Drexel-Hall during the current month. Profit Centers Drexel-Hall Store 1 Store 2 Store 3 Dollars % Dollars % Dollars % Dollars % Sales $ 1,800,000 100 % $ 600,000 100 % $ 600,000 100 % $ 600,000 100 % Variable costs 1,080,000 60 372,000 62 378,000 63 330,000 55 Contribution margin $ 720,000 40 % $ 228,000 38 % $ 222,000 37 % $ 270,000 45 % Traceable fixed costs: controllable 432,000 24 120,000 20 102,000 17 210,000 35 Performance margin $ 288,000 16 % $ 108,000 18 % $ 120,000 20 % $ 60,000 10 % Traceable fixed costs: committed 180,000 10 48,000 8 66,000 11 66,000 11 Store responsibility margin $ 108,000 6 % $ 60,000 10 % $ 54,000 9 % $ (6,000 ) (1 )…
The following information is available for Wade Corp.: Sales $550,000 Total fixed expenses $150,000 Cost of goods sold 390,000 Total variable expenses 360,000 A CVP income statement would report gross profit of $160,000. contribution margin of $400,000. gross profit of $190,000. contribution margin of $190,000.
The information provided below was taken from the records of Chotoo Projects for the financialyear ended 31 May 2020.Extract of statement of comprehensive income for the year ended 31 May 2020RRevenue 480 000Direct costs 240 000Rent income 150 000Advertising 4 800Salaries and wages 90 000Rates and taxes 1 200Other operating expenses 80 000Additional information1. Revenue is calculated as direct cost plus 25%.2. Revenue is divided equally each month. Revenue is expected to increase by 18% for thefinancial year ending 31 May 2021.POSTGRADUATE DIPLOMA IN PROJECT MANAGEMENT – ACADEMIC AND ASSESSMENT CALENDARREGENT BUSINESS SCHOOL (RBS) January 2021 173. Fifty percent (50%) of the revenue is for cash and the balance is on credit. Debtorsnormally pay their accounts as follows:• 40% in the month of the invoice, and these debtors are entitled toa 5% discount;• 55% one month after the invoice;The balance is usually written off as bad debts.4. Purchases for June and July are expected to be 30…
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.
YKQOUC251 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?
Crossfire Company segments its business into two regions—East and West. The company prepared a contribution format segmented income statement as shown below: Total Company East West Sales $ 910,000 $ 650,000 $ 260,000 Variable expenses 637,000 468,000 169,000 Contribution margin 273,000 182,000 91,000 Traceable fixed expenses 133,000 70,000 63,000 Segment margin 140,000 $ 112,000 $ 28,000 Common fixed expenses 56,000 Net operating income $ 84,000 Required: 1. Compute the companywide break-even point in dollar sales. 2. Compute the break-even point in dollar sales for the East region. 3. Compute the break-even point in dollar sales for the West region. 4. Prepare a new segmented income statement based on the break-even dollar sales that you computed in requirements 2 and 3. What is Crossfire’s net operating income (loss) in your new segmented income statement? 5. Do you think that…