net operating income
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The management of M Corporation has been concerned for some time with the financial performance of its product I54J and has considered discontinuing it on several occasions. Data from the company's accounting system appear below:
| Sales | $ 650,000 |
| Variable Expenses | $ 293,000 |
| Fixed manufacturing expense | $ 221,000 |
| Fixed selling and administrative expense | $ 150,000 |
In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $95,000 of the fixed manufacturing expenses and $85,000 of the fixed selling and administrative expenses are avoidable if product I54J is discontinued. According to the company's accounting system, what is the net operating income earned by
product I54J?
A. $14,000
B. ($357,000)
C. ($14,000)
D. $357,000
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- Little Cory Corporation is considering dropping product G41O. Data from the company's accounting system appear below: All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $117,000 of the fixed manufacturing expenses and $46,000 of the fixed selling and administrative expenses are avoidable if product G41O is discontinued.Required:a. According to the company's accounting system, what is the net operating income earned by product G41O? b. What would be the effect on the company's overall net operating income of dropping product G41O? Should the product be dropped? There is not a word length requirement for this question; however, you must show your work. sales 450,000 variable expenses 185,000 fixesd manufacturing expenses 149,000 fixed selling and administered expenses 113,000Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales $ 1,610,000 Variable expenses 659,000 Contribution margin 951,000 Fixed expenses 1,046,000 Net operating income (loss) $ (95,000) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West Sales $ 430,000 $ 610,000 $ 570,000 Variable expenses as a percentage of sales 52 % 34 % 40 % Traceable fixed expenses $ 288,000 $ 321,000 $ 193,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $29,000 based on the belief that it would…The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system for this product for last year appear below: Sales $ 933,000 Variable expenses $ 410,500 Fixed manufacturing expenses $ 347,000 Fixed selling and administrative expenses $ 254,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $212,500 of the fixed manufacturing expenses and $123,500 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued. What would be the financial advantage (disadvantage) from dropping product D74F?
- A company is a wholesale distributor of electronic equipment who has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales P 1,000,000Variable expenses 390,000Contribution Margin 610,000Fixed Expenses 625,000Net operating Income (loss) P(15,000) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central WestSales P250,000 P400,000 P350,000Variable expenses as a percentage of sales 52% 30% 40%Traceable Fixed Expenses P160,000 P200,000 P175,000 Required: a. Prepare a contribution format income statement segmented by the division. East Central West b. The marketing department has proposed increasing the West Division’s monthly advertising by P15,000 believing that it…Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales $ 1,644,000 Variable expenses 608,620 Contribution margin 1,035,380 Fixed expenses 1,139,000 Net operating income (loss) $ (103,620) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West Sales $ 444,000 $ 650,000 $ 550,000 Variable expenses as a percentage of sales 48% 27% 40% Traceable fixed expenses $ 282,000 $ 335,000 $ 200,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $20,000 based on the belief that it would increase that division's sales by 14%. Assuming…Which of the following would not be considered a discontinued operation to be reported separately on the income statement? A company decides to discontinue all retail sales, which have accounted for 30% of its revenues, in its chain of locations and focus only on services. A company decides to close 10 of its 200 store locations due to poor performance at those locations. A manufacturer that produces and sells both lawn mowers and snow blowers has decided to discontinue the production and sale of snow blowers. A business that sells goods as both a wholesaler and a retailer has decided to close all of its retail outlets.
- On the basis of the following data, the general manager of Foremost Footwear Inc. decided to discontinue Children’s Shoes because it reduced income from operations by $10,000. What is the flaw in this decision if it is assumed that fixed costs would not be materially affected by the discontinuance? Foremost Footwear Inc.Product-Line Income StatementFor the Year Ended April 30, 20Y7 Children's Shoes Men's Shoes Women's Shoes Total Sales $165,000 $300,000 $500,000 $965,000 Costs of goods sold: Variable costs $105,000 $150,000 $220,000 $475,000 Fixed costs 32,000 60,000 120,000 212,000 Total cost of goods sold $137,000 $210,000 $340,000 $687,000 Gross profit $28,000 $90,000 $160,000 $278,000 Selling and adminstrative expenses: Variable selling and admin. expenses $21,000 $45,000 $95,000 $161,000 Fixed selling and admin. expenses 17,000 20,000 25,000 62,000 Total selling and admin. expenses $38,000 $65,000 $120,000 $223,000 Income (loss) from…Mission Company has three product lines: D, E, and F. The following information is available: D E F Sales revenue 83,000 42,000 24,000 Variable expenses 40,000 26,000 15,000 43,000 16,000 9,000 Fixed expenses 12,000 15,000 17,000 Operating income 31,000 1,000 $(8,000) Mission company is thinking of discontinuing product line F because it is reporting an operating loss. All fixed expenses are unavoidable. Assuming Mission Company discontinues product line F and does not replace it, what affect will this have an operating income?Pollenti Company has just merged with another industrial firm whose business had been failing. Pollenti immediately conducted a thorough study of the new company's work processes, and produced a report including the data shown below: •A new inspection process is recommended to minimize defective raw materials. It would cost $12,000 to implement. •Shoddy business practices are resulting in excessive warranty costs?$15,000 more than normal due mainly to material failure. •Reengineering of the assembly line will increase productivity. It would cost $18,000 to implement. •Inefficient workplace design is costing $5,000 in unnecessary rework costs. •Estimated amount of lost profits due to dissatisfied customers who turn to the competition is $80,000. Based on the above, what is the amount of appraisal costs, if any, included here? A) $18,000 B) $12,000 C) $15,000 D) Zero
- The results of the operating activities of Kobe Company for the current year are as follows: Based on these results, Kobe is considering discontinuing department C and establishing a new department D. The estimated revenues and expenses of the new department are as follows: Dept. DNet sales $480,000Cost of goods sold 270,000Direct operating expenses 185,000In addition, the proposed change will cause total indirect operating expenses to increase by $22,000.RequiredDetermine whether Kobe should discontinue department C and establishdepartment D.Beachroamers Inc. decided to discontinue its sculptured driftwood division on June 30, 2021. From January through June of 2021, the division had a loss of $25,000 before operations were stopped. The assets of this division have a carrying value of $575,000, and the company is actively marketing the sale of the division for $550,000, less selling costs of $5,000. Beachroamer's corporate tax rate is 25%. On December 31, the company has not yet received an offer on the division. At what amount should the division be recorded on the balance sheet on December 31? Question 6 options: $545,000 $550,000 $436,000 $440,000A company has five product lines, one of which has Fixed expenses of $173,657 and a Net loss of $40,203. If this product line is eliminated, 48% of the fixed expenses can be eliminated and the remainder will be allocated to other product lines. If management decides to eliminate this product line, the amount the company's net income will increase or decrease(-) is? Round to the nearest dollar and put a negative sign - before a decrease. Do not type the dollar sign.
