Party Supply is trying to decide whether or not to continue its costume segment. The information shown is available for Party Supply's business segments. Assume that neither the Direct fixed costs nor the Allocated common fixed costs may be eliminated, but will be allocated to the two remaining segments. Costumes Party Supplies Floral Decorations Sales $160,000 $110,000 $210,000 Variable costs 84,000 50,000 120,000 Contribution margin 76,000 60,000 90,000 Direct fixed costs 50,000 20,000 25,000 Allocated common fixed costs 30,000 25,000 30,000 Net income $ (4,000) $ 15,000 $ 35,000 If costumes are dropped, what change will occur to profit? PLEASE NOTE: All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345).

Party Supply is trying to decide whether or not to continue its costume segment. The information shown is available for Party Supply's business segments. Assume that neither the Direct fixed costs nor the Allocated common fixed costs may be eliminated, but will be allocated to the two remaining segments. Costumes Party Supplies Floral Decorations Sales $160,000 $110,000 $210,000 Variable costs 84,000 50,000 120,000 Contribution margin 76,000 60,000 90,000 Direct fixed costs 50,000 20,000 25,000 Allocated common fixed costs 30,000 25,000 30,000 Net income $ (4,000) $ 15,000 $ 35,000 If costumes are dropped, what change will occur to profit? PLEASE NOTE: All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345).

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Party Supply is trying to decide whether or not to continue its costume segment. The information shown is available for Party Supply’s business segments. Assume that neither the Direct fixed costs nor the Allocated common fixed costs may be eliminated, but will be allocated to the two remaining segments. Costumes PartySupplies FloralDecorations Sales $160,000 $111,000 $211,000 Variable costs 84,000 49,000 119,000 Contribution margin $76,000 $62,000 $92,000 Direct fixed costs 50,000 19,000 26,000 Allocated common fixed costs 30,000 26,000 30,000 Net income $(4,000) $17,000 $37,000 If costumes are dropped, what change will occur to profit? Profit will decrease by $????
7. Party Supply is trying to decide whether or not to continue its costume segment. The information shown is available for Party Supply’s business segments. Assume that neither the Direct fixed costs nor the Allocated common fixed costs may be eliminated, but will be allocated to the two remaining segments. Costumers Party Supplies Floral Decorations Sales $160,000 $110,000 $210,000 Variable costs 84,000 50,000 120,000 Contribution margin 76,000 60,000 90,000 Direct fixed costs 50,000 20,000 25,000 Allocated common fixed costs. 30,000 25,000 30,000 Net income $…
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Extreme Sports sells logo sports merchandise. The company is contemplating whether or not to continue its custom embroidery service. All of the company’s direct fixed costs can be avoided if a segment is dropped. The information is available for the segments. CustomEmbroidery    LogoApparel Sales $60,000    $251,000 Variable costs 29,000 110,000 Contribution margin $31,000 $141,000 Direct fixed costs 22,000 40,000 Allocated common fixed costs 13,000 51,000 Net income $(4,000) $50,000 A. What will be the impact on net income if the embroidery segment is dropped? Net income $fill in the blank 1 Decrease B. Assume that if the embroidery segment is dropped, apparel sales will increase 10%. What is the impact on the contribution margin and net income solely for the apparel? Contribution margin $fill in the blank 3 Increase Net income $fill in the blank 5 Increase C. Identify one cost that is not relevant…
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Hong Publishing has purchased Lang Publishing. After reviewing titles from both companies, a decision must be made to determine what titles must be dropped. The following information is available to make the decision. Title X Title Y Title Z Sales $100,000 $151,000 $201,000 Variable Cost 49,000 74,000 101,000 Contribution Margin $51,000 $77,000 $100,000 Direct Fixed Cost 19,000 30,000 40,000 Allocated Common Fixed Cost 9,000 14,000 20,000 Net Income $23,000 $33,000 $40,000 D. Determine the cost and the amount that will remain even if Title X is dropped. $fill in the blank 6 E. Which costs and amount will be eliminated if Title X is dropped? $fill in the blank 8 $fill in the blank 10
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