1.
Increase or decrease in the operating income in 2014.
Given information:
2014,
Cost of goods sold of A is 440,000.
Cost of goods sold of B is 930,000.
Selling, general and administrative expense of A is $96,000.
Selling, general and administrative expense of B is $202,500.
Percentage of cost of goods sold of A is 90%.
Percentage of cost of goods sold of B is 80%.
Percentage of Selling, general and administrative expense of A is 50%.
Percentage of Selling, general and administrative expense of A is 50%.
Saving on the fixed cost is 40%.
2.
Increase or decrease in the operating income.
3.
To identify: factor which should be considered before taking the decision of division.
Want to see the full answer?
Check out a sample textbook solutionChapter 11 Solutions
Cost Accounting, Student Value Edition Plus MyAccountingLab with Pearson eText -- Access Card Package (15th Edition)
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education