Question 2: Bed and Bath, a retailing company has two departments, Hardware and Linens. The company's most recentmonthly contribution format income statement is given below:DepartmentTotalHardwareLinensSales$40,00,000$30,00,000$10,00,000Variable expenses13,00,0009,00,0004,00,000Contribution MarginFixed expenses21,00,00014,00,000$700,000600,00027,00,00022,00,000$5,00,000800,000($200,000)Net Operating IncomeA study indicates that, $340,000 of the fixed expenses charged to Lines are sunk costs or allocated cost that will continue toincur even if the Linens department is dropped. In addition, the elimination of the Lines department will result in a 10% increasein the sales of the Hardware department.Required : If the Linens Department is dropped, what will be the effect on the net operating income of the company as awhole?[

The decision on whether to keep or drop the unprofitable segment, division , department is based on…

Answered: Question 2: Bed and Bath, a retailing…

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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retailer has three departments—Housewares, Appliances, and Clothing—and buys advertising that benefits all departments. Advertising expense is $150,000 for the year, and departmental sales for the year follow: Housewares, $356,250; Appliances, $641,250; and Clothing, $427,500. How much advertising expense is allocated to Appliances if allocation is based on departmental sales? a. $37,500 c. $45,000 e. $641,250 b. $67,500 d. $150,000
please dont provide answer in image format thank you Assume a retailing company has two departments—Department A and Department B. The company’s most recent contribution format income statement follows: Total Department A Department B Sales $ 800,000 $ 350,000 $ 450,000 Variable expenses 350,000 250,000 100,000 Contribution margin 450,000 100,000 350,000 Fixed expenses 400,000 140,000 260,000 Net operating income (loss) $ 50,000 $ (40,000) $ 90,000 The company says that $60,000 of the fixed expenses being charged to Department A are sunk costs or allocated costs that will continue if the segment is discontinued. However, if Department A is discontinued the sales in Department B will drop by 18%. What is the financial advantage (disadvantage) of discontinuing Department A?
iii) Determine the cost of direct material and salesman salary if the company produces *XX,XXX (80,000-90,000) bottles of drink. (CLO3, C3) iv) If production unit is *XXXXX (90,000 – 110,000): (CLO3, C3) a) Calculate total product cost b) Calculate total period cost v) Form cost function for: (CLO3, C3) a) Product cost b) Period cost
Bed & Bath, a retailing company, has two departments—Hardware and Linens. The company’s most recent monthly contribution format income statement follows: Total Department Hardware Linens Sales $ 4,000,000 $ 3,000,000 $ 1,000,000 Variable expenses 1,300,000 900,000 400,000 Contribution margin 2,700,000 2,100,000 600,000 Fixed expenses 2,200,000 1,400,000 800,000 Net operating income (loss) $ 500,000 $ 700,000 $ (200,000) A study indicates that $340,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 10% decrease in the sales of the Hardware Department. Based on the visualization: The relevant fixed cost in the decision to discontinue the Linens Department is: multiple choice 1 $340,000. $460,000. $800,000. $600,000. The total foregone contribution margin associated with dropping…
Subject: Business Economics QUESTION – 3The following data have been taken from the book of Ubaida Company Ltd. For the year 2002-03.Inventories July 1 June 30Raw Materials Rs. 36,000 Rs. 75,000Goods In Process 90,000 75,000Finished Goods 50,000 75,000 Data for the YearSales Rs. 960,000 Purchases ( Raw Materials ) Rs. 410,000Purchase discount 15,000 Direct Labour incurred 175,000Purchase Return 20,000 Transportation Inward 10,000Rent (Factory) 35,000 Fuel & Power 55,000Rent (Office) 3,000 Utility (Factory) 13,000Utility (Office) 1,500 Transportation Outward 15,000Factory Supervisor Salary 8,000 Depreciation ( Furniture) 10,000Depreciation( Machines) 20,000…
Stage 2 ABC for a Wholesale CompanyInformation is presented for the activity costs of Brighton Wholesale Company: Activity Cost per Unit of Activity Driver Customer relations $82.00 per customer per month Selling 0.09 per sales dollar Accounting 7.00 per order Warehousing 0.60 per unit shipped Packing 0.35 per unit shipped Shipping 0.40 per pound shipped The following information pertains to Brighton Wholesale Company's activities in Colorado for the month of June 2017: Number of orders 320 Sales revenue $218,000 Cost of goods sold $98,100 Number of customers 40 Units shipped 5,400 Pounds shipped 81,000 RequiredDetermine the profitability of sales in Colorado for June 2017.Do not use a negative sign with your answers. Profitability of Sales in Colorado March 2017 Sales revenue Answer Less: Cost of goods sold Answer Customer relations Answer Selling expenses Answer Accounting Answer Warehousing Answer…
Bed & Bath, a retailing company, has two departments—Hardware and Linens. The company’s most recent monthly contribution format income statement follows: Total Department Hardware Linens Sales $ 4,240,000 $ 3,190,000 $ 1,050,000 Variable expenses 1,331,000 919,000 412,000 Contribution margin 2,909,000 2,271,000 638,000 Fixed expenses 2,230,000 1,380,000 850,000 Net operating income (loss) $ 679,000 $ 891,000 $ (212,000) A study indicates that $375,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continue even if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 19% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department?
Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format incomestatement for a recent month for the two games appears below:Claimjumper Makeover TotalSales ............................................ $30,000 $70,000 $100,000Variable expenses ...................... 20,000 50,000 70,000Contribution margin ..................... $10,000 $20,000 30,000Fixed expenses .......................... 24,000Net operating income .................. $ 6,000Required:1. Compute the overall contribution margin (CM) ratio for the company.2. Compute the overall break-even point for the company in sales dollars.3. Verify the overall break-even point for the company by constructing a contribution format incomestatement showing the appropriate levels of sales for the two products.
A retail store has three departments, S, T, and U, and pays for general advertising that benefits all departments. Advertising expense totaled $41,000 for the year, and departmental sales were as follows. Allocate advertising expense to Department T based on departmental sales. (Do not round your intermediate calculations.) Department Sales $ $ 137,000 T215,050 U 160, 450 Total $ 512,500
Restate the following income statement for a retailer in contribution format. Sales revenue ($100 per unit) $ 91,000 Less cost of goods sold ($58 per unit) 52,780 Gross margin 38,220 Less operating costs: Commissions expense ($7 per unit) $ 6,370 Salaries expense 7,800 Advertising expense 5,900 Shipping expense ($2 per unit) 1,820 21,890 Operating income $ 16,330 Per Unit select an income statement item $enter a dollar amount $enter a dollar amount select an opening name for section one : select an income statement item $enter a dollar amount enter a dollar amount select an income statement item…
Home Sweet Home, a garden furniture company, has two departments: Decks and Pergolas. A recent monthly income statement for the company follows: Department Decks Pergolas Total Sales $ 3,000,000 $ 1,000,000 $ 4,000,000 Less: Variable expenses 900,000 400,000 1,300,000 Contribution margin 2,100,000 600,000 2,700,000 Less: Fixed expenses 1,400,000 800,000 2,200,000 Net operating income (loss) $ 700,000 $ (200,000 ) $ 500,000 A study indicates that $240,000 of the fixed expenses being charged to pergolas are sunk costs or allocated costs that will continue even if the pergola department is dropped. In addition, the elimination of the pergola department will result in a 20% decrease in the sales of the decks department. Required:If the pergola department is dropped, what will be the effect on the net operating income of the company as a whole? Net Operating Income ____________by _________________
Question 3Study the scenario and complete the questions that follow:Nonna Greco LimitedNonna Greco Limited manufactures and sells Italian HIP sunglasses. The following information relatesto January 2020:Units manufactured and sold: 500Income statement:RSales 261 500Less: Manufacturing costs 223 000Material 75 000Labour 50 000Manufacturing overheads (@ R20 per machine hour) 98 00038 500Less: Selling and administrative expenses (60% fixed) 17 500Net profit 21 000The following changes will come into effect on 1 February 2020: A sales price increase of 10%, resulting in a 5% decrease in sales volume. Due to negotiations with the labour union, the labour rate per hour will increase by 6%. It is expected that material costs will increase by 10%.The variable budget for manufacturing overheads indicates a total cost ofR94 400 at a capacity utilisation of 4 600 hours.Source: Hunde, T. (2020)Required:3.1 Calculate the total marginal income and marginal income per unit for the year ended 1…

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