•TCC Furniture Makers makes chairs and tables. With the following data should TCCdiscontinue the table division?Chair DivisionTable DivisionSales Revenue1,020,000600,000COGS200,000500,000Contribution Margin800,000100,000The total fixed cost is 690,000. One third of the fixed cost can be eliminated if the tabledivision is discontinued.O No, Discontinuing the division is lower net income by 600,000O Yes, Discontinuing the division will increase net income by 130,000O No, Discontinuing the division will increase net income by 100,000

Step 1: net income with both divisions.Total Contribution Margin = Chair Division Contribution…

Answered: •TCC Furniture Makers makes chairs and…

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter12: Differential Analysis And Product Pricing

Section: Chapter Questions

Problem 1SEQ: Mario Company is considering discontinuing a product. The costs of the product consist of $20,000...

See similar textbooks

Similar questions

Division X makes a part that it sells to customers outside of the company. Data concerning this part appear below: Selling price to outside customers.... Variable cost per unit. Total fixed costs....... Capacity in units. $50 $30 Select one: O a. $50 O b. $49 O c. $46 O d. $30 $400,000 25,000 Division Y of the same company would like to use the part manufactured by Division X in one of its products. Division Y currently purchases a similar part made by an outside company for $49 per unit and would substitute the part made by Division X. Division Y requires 5,000 units of the part each period. Division X has ample excess capacity to handle all of Division Y's needs without any increase in fixed costs and without cutting into outside sales. According to the formula in the text, what is the lowest acceptable transfer price from the standpoint of the selling division?
Discontinuing a Segment Anthropologie, owned by URBN, sells both standard and custom size furniture items. Assume that the contribution income statements for both segments follow. Standard Custom Total Sales $2,000,000 $220,000 $2,220, 000 Less variable costs 1,200,000 176, 000 1,376,000 Contribution margin 800, 000 44,000 844, 000 Less fixed costs 600,000 77,000 677,000 Net income (loss) $200,000 $ (33,000) $167,000 Management is considering discontinuing the Custom segment due to the segment's net loss of $33,000. Of the total fixed costs for the Custom segment, $22,000 would not be incurred (a cost saving) if the Custom segment is dropped. Management expects no changes to the sales of the Standard segment if the Custom segment is discontinued. REQUIRED If the Custom segment is discontinued, what will be the net effect on the profit of the company? Note: enter all numbers as positive numbers, do NOT use a negative sign. Profits would Answer increase by $Answer.
Please show me your solution so I can check if mine's correct. Thank you. ABC Corporation manufactures products W, X,Y, AND Z from a joint process. Additional information is as follows: Sales If processed further Units Value at Additional Sales Product Produced Split-off Costs Value W 6,000 P 80,000 P 7,500 P 90,000 X 5,000 60,000 6,000 70,000 Y 4,000 40,000 4,000 50,000 Z 3,000 20,000 2,500 30,000 Total 18,000 P200,000 P20,000 P240,000 Assuming that total joint costs of P160,000 were allocated using the relative sales value at split- off approach, what joint costs were allocated to each product? W________________ X__________________ Y________________ Z __________________
Sammy Company is considering eliminating its Commerclal division. The company allocates fixed costs based on division sales. If the Commercial diviesion is dropped, of ts vanate costs are avoidable, and $101,00 0 of its fixed costs are avoldable. The impact on Sammy's operating Income from eliminating the commercial division would be Garden Sales Farm Commercial $ 680,000 $ 923,000 $ 695,000 Variable costs Contribution margin 373,900 415,000 650,800 306,100 508,000 44,200 Fixed costs 248,200 336,500 253,500 Net income (loss) 57,900 171,500 (209,300) Multiple Choice $56,800 decrease $13,000 increase $39,000 increase $7,300 decrease 25
2. Division X makes a part that it sells to customers outside of the company. Data concerning this part appear below: Selling Price to Outside Customers Variable Cost per Unit Total Fixed Costs Capacity in Units 70 36 $300,000 25,000 $ $ Division Y of the same company would like to use the part manufactured by Division X in one of its products. Division Y currently purchases a similar part made by an outside company for $65 per unit and would substitute the part made by Division X. Division Y requires 5,000 units of the part each period. Division X is currently selling 18,000 units to outside customers. According to the transfer pricing formula, what is the lowest acceptable limit on the transfer price for Division X? A) $48. $36. B) $65. C) D) $70.
2. Division A makes a part that is sells to customers outside of the company. Data concerning this appear as follows: Sales (100,000 units) P800,000 Direct material 2 Direct labor 2 Variable Overhead 1 Variable Selling &Admin 0. 20 Fixed overhead 0.10 Fixed selling &admin 0.05 If Division B purchase the part to Division A, how much is the transfer price if the basis is: a. Variable Cost b. Full production cost c. Variable Cost + markup of 50% d. Market price
PROBLEM 13-26 Finely Segmented Income Statements [LO1] Companhia Bradesco, S.A., of Brazil, an industrial supply store chain, has two divisions. The company's contribution format income statement segmented by divisions for last year is given below (the currency in Brazil is the real, denoted here by R): Total Division Company Plastics Glass Sales. Variable expenses R1,500,000 700,000 R900,000 400,000 R600,000 300,000 Contribution margin . 800,000 500,000 300,000 Traceable fixed expenses: Advertising. Depreciation 300,000 140,000 220,000 180,000 92,000 118,000 120,000 48,000 102,000 Administration. Total.... 660,000 390,000 270,000 R 30,000 Divisional segment margin. Common fixed expenses 140,000 100,000 R110,000 Net operating income.. R 40,000 Top management doesn't understand why the Glass Division has such a low segment mar- gin when its sales are only one-third less than sales in the Plastics Division. Accordingly, man- agement has directed that the Glass Division be further…
An automated turning machine is the current constraint at Jordison Corporation. Three products use this constrained resource. Data concerning those products appear below: Selling price per unit Variable cost per unit Minutes on the constraint Multiple Choice Rank the products in order of their current profitability from most profitable to least profitable. In other words, rank the products in the order in which they should be emphasized. (Round your intermediate calculations to 2 decimal places.) LN, JQ, RQ RQ, LN, JQ RQ, JQ, LN JQ, RQ, LN $ $
Sandpiper Inc. has a division that manufactures a component that sells for $165 and has a variable cost of $45. Another division of the company wants to purchase the component Fixed cost per unit of the component is $20. What is the minimum transfer price if the division is operating at capacity? OA. $165 OB. $45 OC. $20 OD. $65
packman company has a division that manufactures a component that sells for $72 and has variable costs of $29 and fixed costs of $18. another division wants to purchase the component. what is the minimum transfer price if the division is operating at capacity? a. $72 b. $29 c. $47 d. $18
Marin Company makes several products, including canoes. The company reports a loss from its canoe segment (see below). All its variable costs are avoidable, and $300,000 of its fixed costs are avoidable. Segment Income (Loss) Sales Variable costs Contribution margin Fixed costs Income (loss) (a) Compute the income increase or decrease from eliminating this segment. (b) Should the segment be continued or eliminated? Required A Required B Complete this question by entering your answers in the tabs below. $ 980,000 700,000 280,000 340,000 $ (60,000) Segment Elimination Analysis Compute the income increase or decrease from eliminating this segment. Income Increase (Decrease) Sales Variable costs Contribution margin Fixed costs Income (loss) Continue $ 0 Eliminate 0 $
Central Industries has three product lines: A, B, and C. The information given below is available. Central Industries is thinking about dropping Product C because it is reporting a loss. Assume Central Industries drops Product C ?and does not replace it. What will happen to operating income Sales Variable costs Contribution margin. Avoidable fixed costs Unavoidable fixed costs Operating income(loss) Product A $100,000 76.000 24,000 9,000 6.000 $9.000 Product B S90,000 48,000 42,000 18,000 9.000 $15.000 Product C $44,000 35,000 9,000 3,000 7.700 S(1.700) increase by $600 increase by S1,700 () decrease by S6,000 decrease by S9,000 ) increase by S2,400 ()

SEE MORE QUESTIONS

Recommended textbooks for you

Survey of Accounting (Accounting I)

Accounting

ISBN:

9781305961883

Author:

Carl Warren

Publisher:

Cengage Learning

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

Survey of Accounting (Accounting I)

Accounting

ISBN:

9781305961883

Author:

Carl Warren

Publisher:

Cengage Learning

Managerial Accounting: The Cornerstone of Busines…

Accounting

ISBN:

9781337115773

Author:

Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:

Cengage Learning

SEE MORE TEXTBOOKS