The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system for this product for last year appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $ 927,000 $ 407,500 $ 341,000 $ 248,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $209,500 of the fixed manufacturing expenses and $120,500 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued. What would be the financial advantage (disadvantage) from dropping product D74F?
Q: Members of the board of directors of Security Check have received the following operating income…
A: 1. Incremental Analysis for Discontinuation Decision The expected decrease in revenues…
Q: Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for…
A: Fixed expenses of a company includes both traceable and non-traceable expenses. Calculation of…
Q: Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for…
A: Incremental income is the benefit a business gains from an increment in sales. It tends to be…
Q: Gion Company is considering eliminating its windows division, which reported an operating loss for…
A: Operating income is the income earned through day-to-day business operations. Further, a business…
Q: Head Bucket, Inc. has two product lines—batting helmets and football helmets. The income statement…
A: Operating income (loss)=Sales revenue-Variable costs+Fixed costs
Q: Lantern Company is thinking of discontinuing product line F because it is reporting an operating…
A: Introduction:- Lantern company discontinuing product line F It is operating loss is $9,000…
Q: Little Cory Corporation is considering dropping product G41O. Data from the company's accounting…
A: a. Particulars Amount Sales 450000 Variable expense -185000 Contribution margin 265000…
Q: The management of Furrow Corporation is considering dropping product LO7E. Data from the company's…
A: While making decision fixed costs are not relevant and should not be considered. Avoidable…
Q: On the basis of the following data, the general manager of Foremost Footwear Inc. decided to…
A: Fixed expenses (Fixed costs and Fixed selling and admin. expenses) will not become 0 if Children…
Q: The management of Furrow Corporation is considering dropping product LO7E. Data from the company's…
A: Sales 830,000 Less: Variable expense 365,000 Contribution margin 465,000 Less: Fixed…
Q: The management of Bonga Corporation is considering dropping product D74F. Data from the company's…
A: Working Note: Total fixed costs = Fixed manufacturing expenses + Fixed selling and administrative…
Q: Soar Incorporated is considering eliminating its mountain bike division, which reported an operating…
A: Operating Income : The operating income find Total revenue less operating expenses. It does not…
Q: Head Bucket, Inc. has two product lines-batting helmets and football helmets. The income statement…
A: Income Statement of the business means a financial statement which shows all revenues and expenses…
Q: The management of Bonga Corporation is considering dropping product D74F. Data from the company's…
A: When there is option to continue the production of the product or to drop the product, then net…
Q: Astro Co. sold 20,000 units of its only product and incurred a $50,000 loss (ignoring taxes) for the…
A: Break-even point: The point where there is neither profit nor loss is called the break-even point.…
Q: Compute the sales level required in both dollars and units to earn $200,000 of target pretax income…
A: Under Marginal costing Sales Revenue - Total Variable cost - Total Fixed cost = Profit It is…
Q: I need some help on this practice quiz question.
A: Revenue: Revenue refers to the income received from the business activity or sale of the output,…
Q: - On the basis of the following data, the general manager of Hawkeye Shoes Inc. decided to…
A: An income statement is one of several financial statements used to evaluate a company's financial…
Q: Your Company is considering discontinuing a product. Data from the company's accounting system…
A: This question deals with the concept of decision making. Here in this question decision is about…
Q: The management of Bonga Corporation is considering dropping product D74F. Data from the company's…
A: Avoidable fixed expenses are those fixed expenses which can be avoided if a particular product or…
Q: The Draper Corporation is considering dropping its Doombug toy due to continuing losses. Data on the…
A: Financial advantage (disadvantage) from discontinuing the production and sale of Doombugs = Saving…
Q: The Draper Company is considering dropping its Dream bug toy due to continuing losses. Revenue and…
A: Contribution margin shows the margin of sales revenue after deducting variable costs of the product
Q: A company is a wholesale distributor of electronic equipment who has been experiencing losses for…
A: Solution:- a)Preparation of a contribution format income statement segmented by the division as…
Q: Beachroamers Inc. decided to discontinue its sculptured driftwood division on June 30, 2021. From…
A: Fair value is the market value of an asset. Selling costs are those costs which a company incurs on…
Q: Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for…
A: Contribution margin is the result of sales reduced by variable expenses whereas net operating income…
Q: Crane, Inc., manufactures golf clubs in three models. For the year, the Big Bart line has a net loss…
A: Introduction: A company's net income commonly refers to its net profit or net earnings. Net earnings…
Q: Members of the board of directors of Security Team have received the following operating income data…
A: Expected decrease in revenue=Total-Household system=$690,000-$360,000=$330,000
Q: A company has five product lines, one of which has Fixed expenses of $173,657 and a Net loss of…
A: Segment Reporting; When a company's operating segments are reported in the financial statements that…
Q: On the basis of the following data, the general manager of Hawkeye Shoes Inc. decided to discontinue…
A: Differential analysis: Differential analysis refers to the analysis of differential revenue that…
Q: The management of Bonga Corporation is considering dropping product D74F. Data from the company's…
A: Marginal Costing - Company identify operating profit or loss by reducing variable costs and Fixed…
Q: Fido Company has three segments, one of which is unprofitable. The Duchess Doggy Biscuit segment had…
A: Calculate the amount of net loss after elimination:
Q: On the basis of the following data, the general manager of Foremost Footwear Inc. decided to…
A: If Children's Shoes are discontinued, there will be no variable cost because there would be no…
Q: Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for…
A:
Q: Product U23N has been considered a drag on profits at Jinkerson Corporation for some time and…
A: Lets understand the basics. When there is option of whether continue to manufacture product or…
Q: Bell enterprises currently produces several products. Model L78 is showing a net operating loss as…
A: Net Operating Loss is when the cost of operations is more than the revenue generated from these…
Q: nfield company is considering eliminating its backpack division, which reported an operating loss…
A: Solution: Loss if division continue (42,700) Loss if division dropped ($534,000 x 60%)…
Q: Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for…
A: Contribution margin income statement shows variable costs and fixed costs in such a manner so that…
Q: Carns Company Is considering eliminating Its Small Tools Division, which reported a loss for the…
A: Avoidable fixed costs are relevant fixed costs because they wont be incurred in case of no…
Q: Members of the board of directors of Security One have received the following operating income data…
A: Under differential analysis, the unavoidable fixed cost shall be compared with the current operating…
Q: Lafayette Corp. is considering eliminating its mountain bike division, which reported an operating…
A: Net income/Loss = Sales - Variable costs - Fixed costs
Q: Sanra company is considering eliminating its mountain bike division, which reported an operating…
A: Segment reporting means taking a different division of the business as separate segments. Separate…
Q: Product Sigma has revenue of $436,000, variable cost of goods sold of $320,000, variable selling…
A: Fixed cost does not change whether the Product Sigma continues or discontinues. Variable costs…
Q: Mission Company has three product lines: D, E, and F. The following information is available:…
A: Operating income is the total income generated in the firm from operating activities. It is…
Q: The effect on net income of no longer manufacturing widgets is a:
A: Fixed cost remains constant irrespective of the level of production and variable cost changes with…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system for this product for last year appear below: Sales $ 933,000 Variable expenses $ 410,500 Fixed manufacturing expenses $ 347,000 Fixed selling and administrative expenses $ 254,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $212,500 of the fixed manufacturing expenses and $123,500 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued. What would be the financial advantage (disadvantage) from dropping product D74F?The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system for this product for last year appear below: Sales Variable expenses $ 937,000 $ 416,000 $ 351,000 Fixed manufacturing expenses Fixed selling and administrative expenses $ 258,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $218,000 of the fixed manufacturing expenses and $129,000 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued. According to the company's accounting system, what is the net operating income (loss) earned by product D74F? Include all costs in this calculation-whether relevant or not. $88,000 ($521,000) ($88,000) $521,000The management of M Corporation has been concerned for some time with the financial performance of its product I54J and has considered discontinuing it on several occasions. Data from the company's accounting system appear below: Sales $ 650,000 Variable Expenses $ 293,000 Fixed manufacturing expense $ 221,000 Fixed selling and administrative expense $ 150,000 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $95,000 of the fixed manufacturing expenses and $85,000 of the fixed selling and administrative expenses are avoidable if product I54J is discontinued. According to the company's accounting system, what is the net operating income earned by product I54J? A. $14,000 B. ($357,000) C. ($14,000) D. $357,000
- The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below: Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $803, 200 $417,300 $273,000 $233,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $193,000 of the fixed manufacturing expenses and $167,300 of the fixed selling and administrative expenses are avoidable if product B90D is discontinued. Required: 1. What would be the financial advantage (disadvantage) of dropping B90D? 米 2. Should B90D be dropped? O Yes O NoThe management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below Sales Variable expenses Fixed manufacturing expenses Fixed selling and administrative expenses $ 807,500 $ 419,500 $274,400 $ 234,200 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $194,000 of the fixed manufacturing expenses and $168,200 of the fixed selling and administrative expenses are avoidable if product B900 is discontinued. Required: What would be the financial advantage (disadvantage) of dropping 890D? Should the product be dropped? Not operating income (loss) would by it product B90D were dropped Therefore, the product dropped Show All ItemsWingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales Variable expenses Contribution margin Fixed expenses $ 1,575, 000 659, 400 915, 600 1,007, 000 $ (01, 400) Net operating income (loss) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East $435, 000 West $540, 000 Sales Variable expenses as a percentage of sales Traceable fixed expenses S600, 000 40% $326, 000 48% 39% $264, 000 $197,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $28,000 based on the belief that it would increase that division's sales by 12%. Assuming these estimates are accurate, how much would…
- Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ 1,559,000 567,150 991,850 1,091,000 $ (99,150) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Sales Variable expenses as a percentage of sales Traceable fixed expenses East $ 359,000 $ 291,000 45% Division Central $ 640,000 24% $ 329,000 West 560,000 45% $ 204,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $22,000 based on the belief that it would increase that division's sales by 12%. Assuming these estimates are accurate, how much would…Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format Income statement: sales variable expenses Contribution margin Fixed expenses $ 1,610,000 551,400 Net operating income (loss) 1,058,600 1,164,000 $ (105,400) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following Information: Sales East $410,000 Division Central $ 670,000 West $530,000 Variable expenses as a percentage of sales Traceable fixed expenses 52% 22% 36% $ 278,000 $ 326,000 $ 200,000 Required: 1. Prepare a contribution format Income statement segmented by divisions. 2-8. The Marketing Department has proposed increasing the West Division's monthly advertising by $27,000 based on the belief that it would increase that division's sales by 13%. Assuming these estimates are accurate, how much…Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales $ 1,610,000 Variable expenses 659,000 Contribution margin 951,000 Fixed expenses 1,046,000 Net operating income (loss) $ (95,000) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central West Sales $ 430,000 $ 610,000 $ 570,000 Variable expenses as a percentage of sales 52 % 34 % 40 % Traceable fixed expenses $ 288,000 $ 321,000 $ 193,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $29,000 based on the belief that it would…
- Req 1 Req 2A Req 2B Prepare a contributlon format Income statement segmented by dlvislons. Division Total Company East Central West Req 1 Req 2A Req 2B The Marketing Department has proposed increasing the West Division's monthly advertising by $22,000 based on the belief that it would increase that division's sales by 13%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease) if the proposal is implemented? (Do not round intermediate calculations.) Net operating income will by Req 1 Req 2A Req 2B Would you recommend the increased advertising? OYes NoA company is a wholesale distributor of electronic equipment who has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales P 1,000,000Variable expenses 390,000Contribution Margin 610,000Fixed Expenses 625,000Net operating Income (loss) P(15,000) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Division East Central WestSales P250,000 P400,000 P350,000Variable expenses as a percentage of sales 52% 30% 40%Traceable Fixed Expenses P160,000 P200,000 P175,000 Required: a. Prepare a contribution format income statement segmented by the division. East Central West b. The marketing department has proposed increasing the West Division’s monthly advertising by P15,000 believing that it…Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) In an effort to resolve the problem, the company would like to prepare an income statement segmented by division. Accordingly, the Accounting Department has developed the following information: Sales Variable expenses as a percentage of sales Traceable fixed expenses $ 1,567,000 576,590 990,410 1,089,000 $ (98,590) Req 1 Req 2A East $ 397,000 47% $ 299,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department has proposed increasing the West Division's monthly advertising by $22,000 based on the belief that it would increase that division's sales by 16%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease)…