answer asap please thank you7.6 Keep-or-Drop DecisionCharlevoix Company produces three products: Torch, Elk, and Walloon. A segmented income statement follows:Sales revenueLess: Variable expensesContribution marginLess direct fixed expenses:Depreciation.AdvertisingTorch$1,2801,115$165Required:5095Elk(Shown in 000's)$18545$14015Walloon85$360288$729276Segment margin$20 $40$27Direct fixed expenses consist of depreciation and advertising. All depreciation on the equipment is dedicated to the product lines. None of theequipment can be sold.Total196$(33)$1,8251,448$37774Assume that each of the three products has a different marketing campaign whose advertising would be eliminated if the associated productwere dropped.1. Conceptual Connection: Estimate the impact on profit that would result from dropping Walloon. Enter amount in full, rather than inthoueande Enr avamale "15000" rather than "1" Less direct fixed expenses:DepreciationAdvertising5095Required:158599674Segment margin$20$40$(33)$27Direct fixed expenses consist of depreciation and advertising. All depreciation on the equipment is dedicated to the product lines. None of theequipment can be sold.276Assume that each of the three products has a different marketing campaign whose advertising would be eliminated if the associated productwere dropped.2. Conceptual Connection: Should Charlevoix keep or drop Walloon?Drop1. Conceptual Connection: Estimate the impact on profit that would result from dropping Walloon. Enter amount in full, rather than inthousands. For example, "15000" rather than "15".Increase3. Conceptual Connection: Charlevoix's CFO decided to conduct an empirical study of previous years' advertising cost data to better understandthe factors that have caused this important expense to vary from year to year. Briefly explain the data analytic type represented by the CFO'sstudy of advertising cost. [Refer to Exhibit 2.2]The empirical study of past advertising cost represents an example of a diagnostic✓data analytic.

Net profit refers to the term which is used in accounting and it states the amount of profit which…

Keep-or-Drop Decision Charlevoix Company produces three products: Torch, Elk, and Walloon. A segmented income statement follows: Sales revenue Less: Variable expenses Contribution marnin Torch $1,280 1,115 €165 Elk (Shown in 000's) $185 45 Walloon 140 $360 288 th Total $1,825 1,448

Keep-or-Drop Decision Charlevoix Company produces three products: Torch, Elk, and Walloon. A segmented income statement follows: Sales revenue Less: Variable expenses Contribution marnin Torch $1,280 1,115 €165 Elk (Shown in 000's) $185 45 Walloon 140 $360 288 th Total $1,825 1,448

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 45E

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Garrett Company provided the following information: Common fixed cost totaled 46,000. Garrett allocates common fixed cost to Product 1 and Product 2 on the basis of sales. If Product 2 is dropped, which of the following is true? a. Sales will increase by 300,000. b. Overall operating income will increase by 2,600. c. Overall operating income will decrease by 25,000. d. Overall operating income will not change. e. Common fixed cost will decrease by 27,600.
Keep-or-Drop Decision Petoskey Company produces three products: Alanson, Boyne, and Conway. A segmented income statement, with amounts given in thousands, follows: Alanson Boyne Conway Total Sales revenue $1,280 $185 $360 $1,825 Less: Variable expenses 1,115 45 252 1,412 Contribution margin $165 $140 $108 $413 Less direct fixed expenses: Depreciation 50 15 13 78 Salaries 95 85 120 300 Segment margin $20 $40 $(25) $35 Direct fixed expenses consist of depreciation and plant supervisory salaries. All depreciation on the equipment is dedicated to the product lines. None of the equipment can be sold. Assume that each of the three products has a different supervisor whose position would remain if the associated product were dropped. Required: CONCEPTUAL CONNECTION: Estimate the impact on profit that would result from dropping Conway. Enter amount in full, rather than in thousands. For example, "15000"…
Keep-or-Drop Decision Petoskey Company produces three products: Alanson, Boyne, and Conway. A segmented income statement, with amounts given in thousands, follows: Alanson Boyne Conway Total Sales revenue $1,280 $185 $285 $1,750 Less: Variable expenses 1,115 45 200 1,360 Contribution margin $165 $140 $85 $390 Less direct fixed expenses: Depreciation 50 15 9 74 Salaries 95 85 112 292 Segment margin $20 $40 $(36) $24 Direct fixed expenses consist of depreciation and plant supervisory salaries. All depreciation on the equipment is dedicated to the product lines. None of the equipment can be sold. Assume that, each of the three products has a different supervisor whose position would be eliminated if the associated product were dropped. Assume that 20% of the Alanson customers choose to buy from Petoskey because it offers a full range of products, including Conway. If Conway were no longer available…
Keep-or-Drop Decision Petoskey Company produces three products: Alanson, Boyne, and Conway. A segmented income statement, with amounts given in thousands, follows: Alanson Boyne Conway Total Sales revenue $1,280 $185 $405 $1,870 Less: Variable expenses 1,115 45 324 1,484 Contribution margin $165 $140 $81 $386 Less direct fixed expenses: Depreciation 50 15 12 77 Salaries 95 85 92 272 Segment margin $20 $40 $(23) $37 Direct fixed expenses consist of depreciation and plant supervisory salaries. All depreciation on the equipment is dedicated to the product lines. None of the equipment can be sold. Assume that each of the three products has a different supervisor whose position would remain if the associated product were dropped. Required: CONCEPTUAL CONNECTION: Estimate the impact on profit that would result from dropping Conway. Enter amount in full, rather than in thousands. For example, "15000"…
Keep-or-Drop Decision Charlevoix Company produces three products: Torch, Elk, and Walloon. A segmented income statement, with amounts given in thousands, follows: Line Item Description Torch Elk Walloon Total Sales revenue $1,280 $185 $315 $1,780 Less: Variable expenses 1,115 45 252 1,412 Contribution margin $165 $140 $63 $368 Less direct fixed expenses: Depreciation 50 15 10 75 Advertising 95 85 76 256 Segment margin $20 $40 $(23) $37 Direct fixed expenses consist of depreciation and advertising. All depreciation on the equipment is dedicated to the product lines. None of the equipment can be sold. Assume that, each of the three products has a different marketing campaign whose advertising would be eliminated if the associated product were dropped. Assume that 30% of the Torch customers choose to buy from Charlevoix because it offers a full range of products, including Walloon. If Walloon were no longer available from Charlevoix, these customers…
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Product B has revenue of $39,500, variable cost of goods sold of $25,500, variableselling expenses of $16,500, and fixed costs of $15,000, creating a loss from operationsof $17,500. Prepare and show in solution a differential analysis as of May 9 todetermine if Product B should be continued (Alternative 1) or discontinued (Alternative 2), assuming fixed costs are unaffected by the decision.
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avapei Company produces three products: A, B, and C. A segmented income statement, with amounts given in thousands, follows: Direct fixed expenses include depreciation on equipment dedicated to the product lines of $20,000 for A, $120,000 for B, and $25,000 for C. None of the product line equipment can be sold, and would have to be disposed of if the product line were dropped. Required What impact on profit would result from dropping Product C? Suppose that 10 percent of the customers for Product B choose to buy from Yavapei because it offers a full range of products, including Product C. If C were no longer available from Yavapei, these customers would go elsewhere to purchase B. Now what is the impact on profit if Product C is dropped?
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