Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Textbook Question
Chapter 7, Problem 4MAD
Segment disclosure by Apple Inc. (AAPL) provides sales information for its major product lines for three recent years as follows (in millions):
The Services segment includes sales from iTunes Store, App Store, Mac App Store, TV App Store, iBooks Store, Apple Music, AppleCare, and Apple Pay. The Other Products segment includes sales from Apple TV, Apple Watch, Beats products, iPod, and Apple-branded accessories.
- a. Which product had the greatest percentage of Year 3 sales? Which product had the least percentage of Year 3 sales? Round to nearest whole percent.
- b. Which product grew the most in sales, in percentage terms, using Year 1 as the base year? Round to nearest whole percent.
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Analyze Apple Inc. by segment
Segment disclosure by Apple Inc. (AAPL) provides sales information for its major product lines for three recent years as follows (in millions):
Segment
Year 3
Year 2
Year 1
iPhone
$137,781
$142,381
$164,888
Mac
28,622
25,740
25,198
iPad
23,724
21,280
18,380
Wearables, Home Accessories
30,620
24,482
17,381
Services
53,768
46,291
39,748
Total
$274,515
$260,174
$265,595
The Wearables, Home Accessories segment includes Airpods, Apple Watch, and Apple TV. The Services segment includes sales from iTunes Store, App Store, Mac App Store, TV App Store, iBooks Store, Apple Music, AppleCare, and Apple Pay.
Question Content Area
a. Prepare a vertical analysis of Year 3 sales. (Round percentages to nearest whole percent.)
Segment
Year 3Sales
Percent ofTotal Sales
iPhone
$137,781
fill in the blank
Mac
28,622
fill in the blank
iPad
23,724
fill in the blank
Wearables, Home Accessories
30,620
fill in the blank
Services
53,768
fill…
Analyze Apple Inc. by segment
Segment disclosure by Apple Inc. (AAPL) provides sales information for its major product lines for three recent years as follows (in millions):
Segment
Year 3
Year 2
Year 1
iPhone
$136,700
$155,041
$101,991
iPad
20,628
23,227
30,283
Mac
22,831
25,471
24,079
Services
24,348
19,909
18,063
Other Products
11,132
10,067
8,379
Total sales
$215,639
$233,715
$182,795
The Services segment includes sales from iTunes Store, App Store, Mac App Store, TV App Store, iBooks Store, Apple Music, AppleCare, and Apple Pay. The Other Products segment includes sales from Apple TV, Apple Watch, Beats products, iPod, and Apple-branded accessories.
a. Prepare a vertical analysis of Year 3 sales. (Round percentages to nearest whole percent.)
Vertical analysis
Amazon.com, Inc.is the largest Internet retailer in the United States. Amazon's income statements through income from operations for two recent years are as follows (in mH!ions):
Amazon.com,Inc.
Operating Income Statements
For the Years Ended December 31 (in millions)
Year 2
Year 1
Product sales
$70,080
$60,903
Service sales
18,908
13,549
Total sales
$88,988
$74,452
Cost of sales
$62,752
$54,181
Fulfillment
10,766
8,585
Marketing
4,332
3,133
Technology and content
9,275
6,565
General and administrative
1,552
1,129
Other operating expense (income), net
133
114
Total operating expenses
$88,810
$73,707
Income from operations
$ 178
$ 745
1.Prepare a vertical analysis of the two operating income statements.Round percentages to one decimal pl
2.Use the vertical analysis to explain the decrease in income from operations.
Chapter 7 Solutions
Managerial Accounting
Ch. 7 - What types of costs are customarily included in...Ch. 7 - Which type of manufacturing cost (direct...Ch. 7 - Which of the following costs would be included in...Ch. 7 - In the variable costing income statement, how are...Ch. 7 - Prob. 5DQCh. 7 - Prob. 6DQCh. 7 - Discuss how financial data prepared on the basis...Ch. 7 - Prob. 8DQCh. 7 - Explain why rewarding sales personnel on the basis...Ch. 7 - Explain why service companies use different...
Ch. 7 - Variable costing Marley Company has the following...Ch. 7 - Prob. 2BECh. 7 - Variable costingsales exceed production The...Ch. 7 - Prob. 4BECh. 7 - Contribution margin by segment The following...Ch. 7 - At the end of the first year of operations, 21,500...Ch. 7 - Gallatin County Motors Inc. assembles and sells...Ch. 7 - Fresno Industries Inc. manufactures and sells...Ch. 7 - On March 31, the end of the first month of...Ch. 7 - On April 30, the end of the first month of...Ch. 7 - On October 31, the end of the first month of...Ch. 7 - The following data were adapted from a recent...Ch. 7 - Estimated income statements, using absorption and...Ch. 7 - The following data were adapted from a recent...Ch. 7 - Prob. 10ECh. 7 - Explain why service companies use different...Ch. 7 - Galaxy Sports Inc. manufactures and sells two...Ch. 7 - Prob. 13ECh. 7 - Sales territory and salesperson profitability...Ch. 7 - Prob. 15ECh. 7 - Prob. 16ECh. 7 - Variable costing income statement for a service...Ch. 7 - Variable costing income statement for a service...Ch. 7 - Prob. 1PACh. 7 - The demand for solvent, one of numerous products...Ch. 7 - During the first month of operations ended May 31,...Ch. 7 - Salespersons report and analysis Walthman...Ch. 7 - Segment variable costing income statement and...Ch. 7 - Absorption and variable costing income statements...Ch. 7 - Income statements under absorption costing and...Ch. 7 - Absorption and variable costing income statements...Ch. 7 - Prob. 4PBCh. 7 - Variable costing income statement and effect on...Ch. 7 - Prob. 1MADCh. 7 - Prob. 2MADCh. 7 - Prob. 3MADCh. 7 - Segment disclosure by Apple Inc. (AAPL) provides...Ch. 7 - Prob. 1TIFCh. 7 - Inventory effects under absorption costing BendOR,...Ch. 7 - Communication Bon Jager Inc. manufactures and...Ch. 7 - Prob. 1CMACh. 7 - Chassen Company, a cracker and cookie...Ch. 7 - Prob. 3CMACh. 7 - Bethany Company has just completed the first month...
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- Apple Inc.: Segment revenue analysis Segment disclosure by Apple Inc. provides sales information for its major product lines for three recent years as follows (in millions): A. Which product had the greatest percentage of Year 3 sales? Which product had the least percentage of Year 3 sales? (Round to nearest whole percent.) B. Which product grew the most in sales, in percentage terms, using Year 1 as the base year? (Round to nearest whole percent.)arrow_forwardApple Inc. designs, manufactures, and markets personal computers and related personal computing and communicating solutions for sale primarily to education, creative, consumer, and business customers. Substantially all of the companys sales over the last five years are from sales of its Macs, iPods, iPads, and related software and peripherals. For two recent fiscal years, Apple reported the following (in millions): Assume that the accounts receivable (in millions) were 24,094 at the beginning of fiscal Year 1. 1. Compute the accounts receivable turnover for Year 2 and Year 1. Round to two decimal places. 2. Compute the days sales in receivables at the end of Year 2 and Year 1. Use 365 days and round to one decimal place. 3. What conclusions can be drawn from (1) and (2) regarding Apples efficiency in collecting receivables?arrow_forwardVertical analysis Amazon.com, Inc. is the largest Internet retailer in the United States. Amazon’s income statements through income from operations for two recent years are as follows (in millions): Amazon.com, Inc. Operating Income Statements For the Years Ended December 31 (in millions) Year 2 Year 1 Product sales $70,080 $60,903 Service sales 18,908 13,549 Total sales $88,988 $74,452 Cost of sales $62,752 $54,181 Fulfillment 10,766 8,585 Marketing 4,332 3,133 Technology and content 9,275 6,565 General and administrative 1,552 1,129 Other operating expense (income), net 133 114 Total operating expenses $88,810 $73,707 Income from operations $178 $745 Required: a. Prepare a vertical analysis of the two operating income statements. Round percentages to one decimal place.arrow_forward
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