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Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
6th Edition
ISBN: 9780134486857
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Chapter 21, Problem 26E
To determine
Calculate the
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Munoz Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment
A were eliminated.
Segment
Sales
Cost of goods sold
Sales commissions
MUNOZ COMPANY
Income Statements for Year 2
Contribution margin
General fixed operating expenses (allocation of president's salary)
Advertising expense (specific to individual divisions)
Net income (loss)
Complete this question by entering your answers in the tabs below.
A
$ 171,000
(123,000)
Required A Required B
Prepare a schedule of relevant sales and costs for Segment A.
Relevant Rev. and Cost items for Segment A
$251,000 $256,000
(91,000)
(81,000)
(24,000)
(23,000)
152,000
(40,000)
0
136,000
(17,000)
31,000
(34,000) (42,000)
(6,000) (16,000)
$ (9,000) $ 78,000
Required
a. Prepare a schedule of relevant sales and costs for Segment A.
b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2)
the elimination of Segment…
Exercise 10-32 (Algo) Activity-Based Costing of Customers (LO 10-3, 4)
Northwestern Bank (NB) offers only checking accounts. Customers can write checks and use a network of automated teller machines.
NB earns revenue by investing the money deposited; currently, it averages 4.1 percent annually on its investments of those deposits.
To compete with larger banks, NB pays depositors 0.3 percent on all deposits. A recent study classified the bank's annual operating
costs into four activities.
Activity
Using ATM
Visiting branch
Processing transactions
Managing functions
Total overhead
Cost Driver
Number of uses
Number of visits
Number of transactions
Total deposits
Cost
$ 1,936,800
1,900,800
8,521,920
7,321,600
$ 19,681,120
Driver Volume
3,228,000 uses
396,000 visits
129,120,000 transactions
$ 615,035,000 in deposits
Data on two representative customers follow:
Emily
Jacob
ATM uses
40
130
Branch visits
5
Number of transactions
Average deposit
200
45
520
$ 10,000
$ 10,000
Sheridan Repairs has 200 auto-maintenance service outlets nationwide. It performs primarily two lines of service: oil changes and
brake repair. Oil change-related services represent 80% of its sales and provide a contribution margin ratio of 20%. Brake repair
represents 20% of its sales and provides a 40% contribution margin ratio. The company's fixed costs are $15,580,800 (that is,
$77,904 per service outlet). Sales mix is determined based upon total sales dollars.
Chapter 21 Solutions
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Ch. 21 - Pierce Company had the following costs: Calculate...Ch. 21 - Hayden Company has 50 units in Finished Goods...Ch. 21 - The Stark Company manufactures a product that is...Ch. 21 - Chaney Company provides lawn care services....Ch. 21 - Prob. 1QCCh. 21 - Prob. 2QCCh. 21 - Donovan Company incurred the following costs while...Ch. 21 - Donovan Company incurred the following costs while...Ch. 21 - Donovan Company incurred the following costs while...Ch. 21 - Donovan Company incurred the following costs while...
Ch. 21 - Donovan Company incurred the following costs while...Ch. 21 - Prob. 8QCCh. 21 - Prob. 9QCCh. 21 - Prob. 10QCCh. 21 - What is absorption costing?Ch. 21 - What is variable costing?Ch. 21 - How are absorption costing and variable costing...Ch. 21 - Prob. 4RQCh. 21 - Prob. 5RQCh. 21 - When units produced are less than units sold, how...Ch. 21 - Explain why the fixed manufacturing overhead cost...Ch. 21 - Prob. 8RQCh. 21 - Prob. 9RQCh. 21 - Prob. 10RQCh. 21 - Why is it appropriate to use variable costing when...Ch. 21 - Prob. 12RQCh. 21 - Prob. 13RQCh. 21 - Prob. 14RQCh. 21 - Prob. 15RQCh. 21 - How can variable costing be used in service...Ch. 21 - Classify each cost by placing an X in the...Ch. 21 - Martin Company had the following costs: Calculate...Ch. 21 - Martin Company had the following costs: Calculate...Ch. 21 - Dracut Company reports the following information...Ch. 21 - Dracut Company reports the following information...Ch. 21 - Adamson, Inc. has the following cost data for...Ch. 21 - Refer to your answers to Short Exercise S21-6....Ch. 21 - Refer to your answers to Short Exercise S21-6....Ch. 21 - Prob. 9SECh. 21 - Prob. 10SECh. 21 - Prob. 11SECh. 21 - Prob. 12SECh. 21 - Meyer Company reports the following information...Ch. 21 - Concord, Inc. has collected the following data for...Ch. 21 - Concord, Inc. has collected the following data for...Ch. 21 - ReVitalAde produced 13,000 cases of powdered drink...Ch. 21 - Refer to Exercise E21-16. Requirements 1. Prepare...Ch. 21 - Prob. 18ECh. 21 - Refer to your answers to Exercise E21-16. In May...Ch. 21 - Refer to Exercise E21-19. Requirements 1. Prepare...Ch. 21 - The Sweet Treats Company manufactures candy that...Ch. 21 - Sampler Company sells two products, Sigma and...Ch. 21 - Prob. 23ECh. 21 - Prob. 24ECh. 21 - Sherman Company provides carpet cleaning services...Ch. 21 - Prob. 26ECh. 21 - Prob. 27APCh. 21 - Prob. 28APCh. 21 - Relative Furniture Company manufactures and sells...Ch. 21 - Prob. 30APCh. 21 - Professional Pool Cleaning Service provides pool...Ch. 21 - Prob. 32BPCh. 21 - Game Source manufactures video games that it sells...Ch. 21 - Prob. 34BPCh. 21 - The 2018 data that follow pertain to Elis Electric...Ch. 21 - Divine Pool Cleaning Service provides pool...Ch. 21 - Prob. 37PCh. 21 - This problem continues the Piedmont Computer...Ch. 21 - CF Industries Holdings, Inc. is one of the largest...Ch. 21 - The Hurley Hat Company manufactures baseball hats....Ch. 21 - Sampson Company operates a manufacturing facility...Ch. 21 - In 100 words or fewer, explain the main...
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