21 Toxemia Salsa Corporation manufactures five flavors of salsa. Last year, Toxemia generated net operating income of $40,000.The following information was taken from last year's income statement segmented by flavor (brackets indicate a negativeamount):Hot AtomicMediumMildWimpy$(2,000) $45,000 $35,000 $50,000 $162,000$(16,000) $(5,000) $7,000 $10,000 $94,000$10,000 $10,000 $10,000 $10,000$84,000$ (26,000) $(15,000) $(3,000) $0Contribution marginSegment marginAllocated common fixed expenses $10,000Segment margin less allocatedcommon fixed expensesToxemia expects similar operating results for the upcoming year. If Toxemia wants to maximize its profitability in the upcomingyear, which flavor or flavors should Toxemia discontinue?O WimpyWimpy, Mild, and Mediumno flavors should be discontinuedWimpy and Mild

Segment margin is the amount of profit or loss produced by one component of a business. Segment…

Toxemia Salsa Corporation manufactures five flavors of salsa. Last year, Toxemia generated net operating income of $40,000. The following information was taken from last year's income statement segmented by flavor (brackets indicate a negative amount): Contribution margin Hot Atomic Mild Medium Wimpy $(2,000) $45,000 $35,000 $50,000 $162,000 $(16,000) $(5,000) $7,000 $10,000 $94,000 Segment margin Allocated common fixed expenses $10,000 $10,000 $10,000 $10,000 $10,000 Segment margin less allocated $ (26,000) $(15,000) $(3,000) $0 $84,000 common fixed expenses Toxemia expects similar operating results for the upcoming year. If Toxemia wants to maximize its profitability in the upcoming year, which flavor or flavors should Toxemia discontinue? O Wimpy O Wimpy, Mild, and Medium O no flavors should be discontinued Wimpy and Mild

Toxemia Salsa Corporation manufactures five flavors of salsa. Last year, Toxemia generated net operating income of $40,000. The following information was taken from last year's income statement segmented by flavor (brackets indicate a negative amount): Contribution margin Hot Atomic Mild Medium Wimpy $(2,000) $45,000 $35,000 $50,000 $162,000 $(16,000) $(5,000) $7,000 $10,000 $94,000 Segment margin Allocated common fixed expenses $10,000 $10,000 $10,000 $10,000 $10,000 Segment margin less allocated $ (26,000) $(15,000) $(3,000) $0 $84,000 common fixed expenses Toxemia expects similar operating results for the upcoming year. If Toxemia wants to maximize its profitability in the upcoming year, which flavor or flavors should Toxemia discontinue? O Wimpy O Wimpy, Mild, and Medium O no flavors should be discontinued Wimpy and Mild

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Moyas Corporation sells a single product for $20 per unit. Last year, the company's sales revenuewas $300,000 and its net operating income was $24,000. If fixed expenses totaled $96,000 for theyear, the break-even point in unit sales was:A) 12,000 units B) 14,100 units C) 9,900 units D) 15,000 units
Kenzi, a manufacturer of kayaks, began operations this year. During this year, the company produced 1,100 kayaks and sold 850 at a price of $1,100 each. At year-end, the company reported the following income statement information using absorption costing. Sales (850 × $1,100) $ 935,000 Cost of goods sold (850 × $425) 361,250 Gross profit 573,750 Selling and administrative expenses 220,000 Income $ 353,750 Additional Information a. Product cost per kayak under absorption costing totals $425, which consists of $325 in direct materials, direct labor, and variable overhead costs and $100 in fixed overhead cost. Fixed overhead of $100 per unit is based on $110,000 of fixed overhead per year divided by 1,100 kayaks produced.b. The $220,000 in selling and administrative expenses consists of $85,000 that is variable and $135,000 that is fixed.Prepare an income statement for the current year under variable costing.
Milotic Corporation sells a single product for ₱25 per unit. Last year, the company's sales revenue was ₱245,000 and its net operating income was ₱29,250. If fixed expenses totaled ₱81,000 for the year, the break-even point in unit sales was _____________ units
Cold One Brewing Company reported the following operating information for a recent year (in millions): Sales $6,608 Cost of goods sold (1,652) Gross profit $4,956 Marketing, general, and admin. expenses (708) Income from operations $ 4,248 Assume that Cold One sold 59 million barrels of beer during the year, variable costs were 75% of the cost of goods sold and 50% of marketing, general, and administrative expenses, and that the remaining costs are fixed. For the following year, assume that Cold One expects pricing, variable costs per barrel, and fixed costs to remain constant, except that new distribution and general office facilities are expected to increase fixed costs by $23.01 million. a. Compute the break-even sales (barrels) for the current year. Round your answer to two decimal places. Enter your answers in millions.fill in the blank 1 million barrels b. Compute the anticipated break-even sales (barrels) for the following year. Round your answer to two decimal…
Prairie Corporation has sales of $7,000,000 in its first year of operation. During this first year of operations its variable costs of goods sold were $2,500,000 of sales. Fixed cost of goods sold were $400,000. Selling and administrative cost were $1,400,000 and taxes were $700,000. Please calculate Prairie Corporation's after-tax income.
Kenzi Kayaking, a manufacturer of kayaks, began operations this year. During this first year, the company produced 1,050 kayaks and sold 800 at a price of $1,050 each. At this first year-end, the company reported the following income statement information using absorption costing. Sales (800 × $1,050) $ 840,000 Cost of goods sold (800 × $500) 400,000 Gross margin 440,000 Selling and administrative expenses 230,000 Net income $ 210,000 Additional Information Product cost per kayak totals $500, which consists of $400 in variable production cost and $100 in fixed production cost—the latter amount is based on $105,000 of fixed production costs allocated to the 1,050 kayaks produced. The $230,000 in selling and administrative expense consists of $75,000 that is variable and $155,000 that is fixed. Required:1. Prepare an income statement for the current year under variable costing.2. Fill in the blanks:
Two companies are expected to have annual sales of 1,000,000 decks of playing cards next year. Estimates for next year are presented below: Company 1 Company 2 Selling price per deck Cost of paper deck Printing ink per deck $ 3.00 0.62 0.13 $3.00 0.65 Labor per deck 0.75 0.15 1.25 Variable overhead per deck 0.30 0.35 Fixed costs $960.000 $252,000 Given these data, which of the following responses is correct? (In units) A B C. D. Breakeven point for Co. 1 533,334 533,334 800,000 800,000 Breakeven point for Co. 2 105,000 105.000 420.000 420,000 Volume at which profits of Co. 1 and Co. 2 are equal 1,000.000 1.180.000 1,000,000 1,180.000 None B A D C Data concerning NikNik Corporation's activity for the 6 months appear below: Machine Electrical Cost Hours January P3,120 February 4,460 March 3.500 April 5,040 May 2,900 June 3,200 4.000 6.000 4,800 5,800 3.600 4,200 Using the high-low method of analysis, estimate the variable electrical cost per machine hour (nearest centavo).
Miltank Company sells a single product for ₱20 per unit. Last year, the company's sales revenue was ₱300,000 and its net operating income was ₱24,000. If fixed expenses totaled ₱96,000 for the year, the contribution margin per unit was ₱__________.
The following is Cullumber Company’s income statement for the past year. Sales revenue $336,000 Cost of goods sold 134,400 Gross margin 201,600 Operating expenses 145,600 Operating income $56,000 If the company wants to sell a new product that costs $49 wholesale while keeping the same markup structure, what will be the price of the new product? (Use the gross margin percentage and round final answer to 2 decimal places, e.g. 25,124.25.) Price of the new product $enter the price of the new product in dollars rounded to 2 decimal places
Samsun company operates with two divisions, sam and sun. The results of the operations last year showed the company earning a net operating income of P468,000 while allocating P1,040,000 ccommon fixed expenses. The contribution margin of Sam was P780,000 while contribution margin ratio for sun ws 40%. Sun was able to generate sales of P3,250,000, and its segment margin was P832,000. The segment margin for sam was: A. P676,000 B. 1,508,000 C. P208,000 D. P832,000
The following information relates to the Magna Company for the upcoming year, based on 490,000 units. Amount Per Unit Sales $ 4,900,000 $ 10.00 Cost of goods sold 3,920,000 8.00 Gross margin 980,000 2.00 Operating expenses 367,500 0.75 Operating profits $ 612,500 $ 1.25 The cost of goods sold includes $1,470,000 of fixed manufacturing overhead; the operating expenses include $122,500 of fixed marketing expenses. A special order offering to buy 86,000 units for $9.30 per unit has been made to Magna. Fortunately, there will be no additional fixed expenses associated with the order and Magna has sufficient capacity to handle the order. How much will operating profits be increased if Magna accepts the special order?
Sanchez & Ryan, Inc, sells a single product. This year, 20,000 units were sold resulting in $130,000 of sales revenue, $60,000 of variable costs, and $17,500 of fixed costs. If sales increase by $19,500 in a year, profits will increase by: