Introduction To Managerial Accounting
8th Edition
ISBN: 9781259917066
Author: BREWER, Peter C., Garrison, Ray H., Noreen, Eric W.
Publisher: Mcgraw-hill Education,
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Textbook Question
Chapter 11, Problem 19P
Dropping or Retaining a Segment
Jackson Count Senior Services is a nonprofit organization devoted to providing essential services to seniors who lie in their own homes within the Jackson Count ea Three services e provided for seniors—home nursing, Meals On Wheels, and housekeeping. Data on revenue and expenses for the past year follow.
The head administrator of Jackson County Senior Seniors, Judith Miyama, considers last sears net operating income of $5,000 to be unsatisfactory therefore, she is considering the possibility of discontinuing the housekeeping program.
The
Required:
1. What is the financial advantage (disadvantage) of discontinuing the Housekeeping program Should the Housekeeping program be discontinued Explain.
2. Prepare a properly formatted segmented income statement that would be more useful to management in assessing the long-run financial viability of its various services.
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The Oasis Company sells sporting equipment in three departments: baseball, soccer and tennis. Oasis is considering eliminating its tennis segment. Oasis will base its decision on the financial results of the tennis segment for its most recent year end, which are:
Sales $2,000,000
Cost of goods sold (750,000)
Sales commissions (200,000)
Contribution margin $1,050,000
Corporate office overhead allocation $1,200,000
Net income/(loss) ($150,000)
Using the information above and relying on a quantitative analysis only,
Answer Choices:
The Tennis Segment should not be eliminated.
OR
The Tennis Segment should be eliminated.
Sophia & More Company sells clothing, shoes and accessories at a city location near you. Information for the just concluded calendar year follows.
Management is considering closing the Shoe segment because of the operating loss and is thinking about expanding the space that is currently devoted to the Accessories segment. A salaried salesperson in the Shoe segment who earns $45,000 will be terminated; however, all other segmental fixed costs will continue to be incurred. Sophia & More will spend $16,000 on remodeling costs and anticipates that sales in the Accessories segment will increase by $70,000. This additional sales revenue is expected to generate a 35% contribution margin for the company. Finally, because clothing customers often purchased shoes and feel strongly about "one-stop shopping," clothing sales are expected to fall by 15% if the Shoe segment is closed. Required: Using incremental analysis, determine whether the Shoe segment should be closed and if so, what…
Chapter 11 Solutions
Introduction To Managerial Accounting
Ch. 11 - What is a relevant cost?Ch. 11 - Define the following terms: incremental cost,...Ch. 11 - Are variable costs always relevant costs? Explain.Ch. 11 - Prob. 4QCh. 11 - “Variable costs and differential costs mean the...Ch. 11 - Prob. 6QCh. 11 - Prentice Company is considering dropping one of...Ch. 11 - Prob. 8QCh. 11 - What is the danger in allocating common fixed...Ch. 11 - Prob. 10Q
Ch. 11 - Give at least four examples of possible...Ch. 11 - Prob. 12QCh. 11 - Define the following terms: joint products, joint...Ch. 11 - Prob. 14QCh. 11 - Prob. 15QCh. 11 - Prob. 16QCh. 11 - The Excel worksheet form that appears below is to...Ch. 11 - The Excel worksheet form that appears below is to...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Prob. 9F15Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Prob. 13F15Ch. 11 - Prob. 14F15Ch. 11 - Cane Company manufactures two products called...Ch. 11 - Identifying Relevant Costs Syahn, AB, is a Swedish...Ch. 11 - Prob. 2ECh. 11 - Make or Buy Decision Troy Engines, Ltd,...Ch. 11 - Special Order Decision Imperial Jewelers...Ch. 11 - Volume Trade-off Decisions Outdoor Luggage, Inc.,...Ch. 11 - Prob. 6ECh. 11 - Sell or Process Further Decisions Dorsey Company...Ch. 11 - Volume Trade-Off Decisions Barlow Company...Ch. 11 - Special Order Decision Delta Company produces a...Ch. 11 - Make or Buy Decision Futura Company purchases the...Ch. 11 - Make or Buy Decision Han Products manufactures...Ch. 11 - Volume Trade-Off Decisions Benoit Company produces...Ch. 11 - Prob. 13ECh. 11 - Identification of Relevant Costs Kristen Lu...Ch. 11 - Prob. 15ECh. 11 - Identification of Relevant Costs Bill has just...Ch. 11 - Prob. 17ECh. 11 - Prob. 18PCh. 11 - Dropping or Retaining a Segment Jackson Count...Ch. 11 - Sell or Process Further Decision (Prepared from a...Ch. 11 - Prob. 21PCh. 11 - Prob. 22PCh. 11 - Make or Buy Decision Silven Industries, which...Ch. 11 - Prob. 24PCh. 11 - Prob. 25PCh. 11 - Close or Retain a Store Superior Markets. Inc.,...Ch. 11 - Sell or Process Further Decisions Come-Clean...Ch. 11 - Make or Buy Decisions “In my opinion, we ought to...
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