62.5pointsExercise 11-17 (Static) Dropping or Retaining a Segment [LO11-2]Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution formatincome statement follows:eBookPrintReferencesSalesVariable expensesContribution marginFixed expensesNet operating income (loss)Total$ 4,000,0001,300,0002,700,0002,200,000$ 500,000DepartmentHardware$ 3,000,000900,0002,100,0001,400,000$700,000Linens$ 1,000,000400,000600,000800,000$ (200,000)A study indicates that $340,000 of the fixed expenses being charged to Linens are sunk costs or allocated costs that will continueeven if the Linens Department is dropped. In addition, the elimination of the Linens Department will result in a 10% decrease in thesales of the Hardware Department.Required:What is the financial advantage (disadvantage) of discontinuing the Linens Department?

Step 1:The Financial Advantage (disadvantage) of discontinuing the Lines Department is the…

Answered: 6 2.5 points Exercise 11-17 (Static)…

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

Exercise 5-1 (Algo) The Effect of Changes in Sales Volume on Net Operating Income [LO5-1] Whirly Corporation’s contribution format income statement for the most recent month is shown below: Total Per Unit Sales (7,300 units) $ 240,900 $ 33.00 Variable expenses 131,400 18.00 Contribution margin 109,500 $ 15.00 Fixed expenses 54,800 Net operating income $ 54,700 Required: (Consider each case independently): 1. What would be the revised net operating income per month if the sales volume increases by 40 units? 2. What would be the revised net operating income per month if the sales volume decreases by 40 units? 3. What would be the revised net operating income per month if the sales volume is 6,300 units? 1. Revised net operating income 2. Revised net operating income 3. Revised net operating income
ouTube Maps er 1 i 05 K ces Mc Graw MU Problem 1-21 (Algo) Traditional and Contribution Format Income Statements [LO1-6] Marwick's Planos, Incorporated, purchases planos from a large manufacturer for an average cost of $1,492 per unit and then sells them to retall customers for an average price of $2,600 each. The company's selling and administrative costs for a typical month are presented below. Costs Selling: Advertising Sales salaries and commissions. Delivery of pianos to customers Utilities Depreciation of sales facilities Administrative: 9°F ain showers Executive salaries Insurance Clerical Depreciation of office equipment During August, Marwick's Planos, Incorporated, sold and delivered 62 planos. Required 1 Required 2 Cost Formula Required: 1. Prepare a traditional format Income statement for August. 2. Prepare a contribution format Income statement for August. Show costs and revenues on both a total and a per unit basis down through contribution margin. $933 per month $4,790…
1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department believes increasing the West Division's monthly advertising by $24,000 will increase that division's sales by 11%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? 2-b. Would you recommend the increased advertising? Complete this question by entering your answers in the tabs below. Req 1 Req 2A Req 2B Prepare a contribution format income statement segmented by divisions. Division Central West
Problem 5A-7 (Algo) Cost Behavior; High-Low Method; Contribution Format Income Statement [LO5-10] Morrisey & Brown, Limited, is the sole distributor of a product with growing sales. Its income statements for the three most recent months follow: Morrisey & Brown, Limited Income Statements For the Three Months Ended September 30 July Sales in units Sales Cost of goods sold Gross margin Selling and administrative expenses: Advertising expense Shipping expense Salaries and commissions Insurance expense Depreciation expense Total selling and administrative expenses Net operating income 4,750 $ 546,250 327,750 218,500 31,800 35,500 81,000 6,550 18,000 172,850 $ 45,650 August 5,250 $603,750 362,250 241,500 31,800 38,100 87,300 6,550 18,000 181,750 $ 59,750 September 5,750 $ 661,250 396,750 264,500 31,800 40,700 93,600 6,550 18,000 190,650 $ 73,850 Required: 1. By analyzing data from the company's income statements, classify each of its expenses (including cost of goods sold) as either…
Bw J KVHZUM123 Corporation has two departments, Toys and Candy. The company's most recent monthly contribution format Income statement follows: Sales Varlable expenses Contribution Margin Fixed Expenses Net operating Income (loss) (ID#79893) (Baruch College - No assistance allowed.) Multiple Choice Total O O Candy $4,200,000 $3,000,000 $1,200,000 2,000,000 1,500,000 500,000 2,200,000 1,500,000 700,000 2,200,000 1,300,000 900,000 (200,000) 200,000 Q) If the Candy Department is dropped, what will be the effect on the net operating Income of the KVHZUM123 Corporation as a whole? O A KVHZUM123's study indicates that $200,000 of the fixed expenses being charged to the Candy Department are sunk costs or allocated costs that will continue even if the Candy Department is dropped. In addition, the elimination of the Candy Department will result in a 20% decrease in the sales of the Toys Department. Decrease by $260,000 0 Increase by $340,000 Department Toys Decrease by $340,000 Decrease by…
SCRUMPTIOUS CUPCAKESProfit and loss accountfor the year ended 30 April 20202020£SalesSales 220,000Cost of sales 120,000Gross Profit 100,000ExpensesSalaries 24,000Other Fixed cost 4,800Distribution 3,000Advertising 4,500Rent 13,200AHUtilities 3,600Other Cost 4,00057,100Operating Profit 42,900 SCRUMPTIOUS CUPCAKESBalance Sheetas at 30 April 20202020£Fixed assetsIntangible assets -Tangible assets 35,000Investments -35,000Current assetsStocks 3,000Debtors 10,000Cash at bank and in hand 6,30019,300Written ReportsCreditors: amounts falling duewithin one year (11,300)Net Current Assets 8,000Total assets less currentliabilities 43,000Net Assets 43,000Capital and reservesCalled up share capital 100Profit and loss account 42,900Shareholders' funds 43,000 please calculate the folliwing ratios: Profitability Ratios – Gross Profit Margin, Net Profit Margin and ROCE● Liquidity – Current Test and Acid Test● Gearing● Activity/Performance – Stock Turnover, Debtors’ Collection Period and AssetTurnover…
5 ! Part 5 of 15 0.4 points eBook Print References Required information [The following information applies to the questions displayed below.] Westerville Company reported the following results from last year's operations: Sales Variable expenses Contribution margin Fixed expenses Net operating income Average operating assets $ 1,400,000 680,000 720,000 440,000 $ 280,000 $875,000 At the beginning of this year, the company has a $300,000 investment opportunity with the following cost and revenue characteristics: Sales $ 480,000 Contribution margin ratio Fixed expenses 80 % of sales $ 336,000 The company's minimum required rate of return is 15%. 5. What is the turnover related to this year's investment opportunity? Note: Round your answer to 1 decimal place. Turnover
igmeniMalh.do?invoker=&takeAssignmentSessionLocator=&inprogress%3Dfalse Show Me How Print Item eBook Contribution Margin and Contribution Margin Ratio For a recent year, McDonald's (MCD) company-owned restaurants had the following sales and expenses (in millions): Sales $15,295.0 Food and packaging $(4,896.9) Payroll (4,134.2) Occupancy (rent, depreciation, etc.) (3,667.7) General, selling, and administrative expenses (2,384.5) $(15,083.3) Operating income $211.7 Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses. a. What is McDonald's contribution margin? Round to the nearest tenth of a million (one decimal place). million b. What is McDonald's contribution margin ratio? Round to one decimal place. % c. How much would operating income increase if same-store sales increased by $800 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the nearest…
p.mheducation.com 05 6 Saved Help S Whirly Corporation's contribution format income statement for the most recent month is shown below Sales (7,800 units) Variable expenses Total $ 249,600 140,400 Per Unit $ 32.00 18.00 Contribution margin 109,200 $14.00 Fixed expenses 55,600 $ 53,600 Net operating income Required: (Consider each case independently). 1. What would be the revised net operating income per month if the sales volume increases by 40 units? 2. What would be the revised net operating income per month if the sales volume decreases by 40 units? 3. What would be the revised net operating income per month if the sales volume is 6,800 units? 1. Revised net operating income 2. Revised net operating income 3 Revised net operating income
Exercise 7-4 (Algo) Basic Segmented Income Statement [LO7-4] Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost infor relating to the products follow: Selling price per unit Variable expenses per unit Traceable fixed expenses per year Product Weedban $11.00 $ 3.00 $ 130,000 Greengrow $39.00 $ 13.00 $ 40,000 Last year the company produced and sold 41,000 units of Weedban and 22,000 units of Greengrow. Its annual common fix expenses are $114,000. Required: Prepare a contribution format income statement segmented by product lines. $ Total Company 0 Product Line Weedban 0 $ 0 Greengrow 0 $ 0 0
Exercise 13-17 (Algo) Dropping or Retaining a Segment [LO13-2] Bed & Bath, a retailing company, has two departments-Hardware and Linens. The company's most recent monthly contribution format income statement follows: Department Total Hardware Linens $ 4,130,000 1,380,000 2,750,000 $ 3,040,000 973,000 2,067,000 $ 1,090,000 407,000 Sales Variable expenses Contribution margin Fixed expenses 683,000 870,000 1,350,000 $ 717,000 2,220,000 Net operating income (loss) $ 530,000 $ (187,000) A study indicates that $379,000 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 11% decrease in the sales of the Hardware Department. Required: What is the financial advantage (disadvantage) of discontinuing the Linens Department?
Exercise 7-4 (Algo) Basic Segmented Income Statement [LO7-4] Royal Lawncare Company produces and sells two packaged products-Weedban and Greengrow. Revenue and cost information relating to the products follow: Selling price per unit Variable expenses per unit Traceable fixed expenses per year Product Greengrow Weedban $ 10.00 $ 37.00 $ 2.70 $ 137,000 $ 13.00 $ 38,000 Last year the company produced and sold 43,500 units of Weedban and 22,500 units of Greengrow. Its annual common fixed expenses are $96,000. Required: Prepare a contribution format income statement segmented by product lines. Sales Variable expenses Contribution margin Traceable fixed expenses Product line segment margin Common fixed expenses not traceable to products Net operating income Product Line Total Company Weedban Greengrow 0 0 0 0 $ 0 $ 0 $ 0

SEE MORE QUESTIONS

Recommended textbooks for you

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

FINANCIAL ACCOUNTING

Accounting

ISBN:

9781259964947

Author:

Libby

Publisher:

MCG

Accounting

ISBN:

9781337272094

Author:

WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.

Publisher:

Cengage Learning,

Accounting Information Systems

Accounting

ISBN:

9781337619202

Author:

Hall, James A.

Publisher:

Cengage Learning,

Horngren's Cost Accounting: A Managerial Emphasis…

Accounting

ISBN:

9780134475585

Author:

Srikant M. Datar, Madhav V. Rajan

Publisher:

PEARSON

Intermediate Accounting

Accounting

ISBN:

9781259722660

Author:

J. David Spiceland, Mark W. Nelson, Wayne M Thomas

Publisher:

McGraw-Hill Education

Financial and Managerial Accounting

Accounting

ISBN:

9781259726705

Author:

John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS