Jones Paper Company produces many colors of paper. The current popularcolor is grey. To increase the production of grey paper, a decision must bemade to determine what color must be dropped. The following informationis available to make the decisionРеachBluePlumSales$40,000$60,000$80,000Variable cost20,00030,00040,000Contribution margin20,00030,00012,00040,000Direct fixed cost8,00016,000Allocated common fixed cost4,0006,0008,000Net income$ 8,000$12,000$16,000What is the total income if all colors were produced?If Peach was dropped, what would be the effect on NetIncome?How much did Peach paper contribute to Fixed Costs?Determine the cost and the amount that will remain even ifPeach is dropped.Which costs and amount will be eliminated if Peach isdropped?

Net income is the difference between total revenues generated and total expense incurred during the…

Jones Paper Company produces many colors of paper. The current popular color is grey. To increase the production of grey paper, a decision must be made to determine what color must be dropped. The following information is available to make the decision Peach Blue Plum Sales $40,000 $60,000 $80,000 Variable cost 20,000 20,000 30,000 40,000 Contribution margin 30,000 40,000 Direct fixed cost 8,000 12,000 16,000 Allocated common fixed cost 4,000 6,000 8,000 Net income $ 8,000 $12,000 $16,000 What is the total income if all colors were produced? If Peach was dropped, what would be the effect on Net Income? How much did Peach paper contribute to Fixed Costs? Determine the cost and the amount that will remain even if Peach is dropped. Which costs and amount will be eliminated if Peach is dropped?

Jones Paper Company produces many colors of paper. The current popular color is grey. To increase the production of grey paper, a decision must be made to determine what color must be dropped. The following information is available to make the decision Peach Blue Plum Sales $40,000 $60,000 $80,000 Variable cost 20,000 20,000 30,000 40,000 Contribution margin 30,000 40,000 Direct fixed cost 8,000 12,000 16,000 Allocated common fixed cost 4,000 6,000 8,000 Net income $ 8,000 $12,000 $16,000 What is the total income if all colors were produced? If Peach was dropped, what would be the effect on Net Income? How much did Peach paper contribute to Fixed Costs? Determine the cost and the amount that will remain even if Peach is dropped. Which costs and amount will be eliminated if Peach is dropped?

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter21: Variable Costing For Management analysis

Section: Chapter Questions

Problem 4CMA: Bethany Company has just completed the first month of producing a new product but has not yet...

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