The management of Woznick Corporation has been concerned for some time with the financial performance of its product V860 and has considered discontinuing it on several occasions. 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 In the company's accounting system all fixed expenses of the company are fully allocated to products. Further investigation has revealed that $30,000 of the fixed manufacturing expenses and $13,000 of the fixed selling and administrative expenses are avoidable if product V860 is discontinued. What would be the financial advantage (disadvantage) from dropping product V860? Multiple Choice ($35,000) ($5,000). $ 150,000 $ 72,000 $ 50,000 $ 33,000 $35,000 $5,000
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- Cullumber Industries carries no inventories. Its product is manufactured only when a customer's order is received. It is then shipped immediately after it is made. For its fiscal year ended October 31, 2025, Cullumber's break-even point was $1.35 million. On sales of $1.50 million, its GAAP income statement showed a gross profit of $257,500, direct materials cost of $508,000, and direct labor costs of $605,000. The contribution margin was $195,000, and variable manufacturing overhead was $50,000. (a) Calculate the following: 1. Variable selling and administrative expenses. 2. 3. Fixed manufacturing overhead. Fixed selling and administrative expenses. LA LA LACrane Industries carries no inventories. Its product is manufactured only when a customer's order is received. It is then shipped immediately after it is made. For its fiscal year ended October 31, 2025, Crane's break-even point was $1.34 million. On sales of $1.50 million, its GAAP income statement showed a gross profit of $242,500, direct materials cost of $508,000, and direct labor costs of $624,000. The contribution margin was $180,000, and variable manufacturing overhead was $52,000. (a) Calculate the following: 1. 2. Your answer is partially correct. 3. Variable selling and administrative expenses. Fixed manufacturing overhead. Fixed selling and administrative expenses. $ $ $ 136000 A 73500 24800Pastina Company manufactures and sells various types of pasta to grocery chains as private label brands. The company’s fiscal year-end is December 31. The unadjusted trial balance as of December 31, 2011, appears below: The equipment is being depreciated using the straight-line method over an eight-year useful life with $10,000 salvage value. The company estimates that 4% of all year-end accounts receivable probably will not be collected. Employee wages are paid twice a month, on the 22nd wages earned for the 1st through the 15th , and on the 7th of the following month for wages earned from the 16th through the end of month. Wages earned from December 16 through December 31, 2011, were $1,565. On October 1, 2011, Pastina borrowed $50,800 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 10%. The principal is due in 10 years. On April 1, 2011, the company lent a supplier $28,000 and a note was signed requiring principal and…
- Pastina Company manufactures and sells various types of pasta to grocery chains as private label brands. The company’s fiscal year-end is December 31. The unadjusted trial balance as of December 31, 2011, appears below: The equipment is being depreciated using the straight-line method over an eight-year useful life with $10,000 salvage value. The company estimates that 4% of all year-end accounts receivable probably will not be collected. Employee wages are paid twice a month, on the 22nd wages earned for the 1st through the 15th , and on the 7th of the following month for wages earned from the 16th through the end of month. Wages earned from December 16 through December 31, 2011, were $1,565. On October 1, 2011, Pastina borrowed $50,800 from a local bank and signed a note. The note requires interest to be paid annually on September 30 at 10%. The principal is due in 10 years. On April 1, 2011, the company lent a supplier $28,000 and a note was…Blossom Industries carries no inventories. Its product is manufactured only when a customer's order is received. It is then shipped immediately after it is made. For its fiscal year ended October 31, 2025, Blossom's break-even point was $1.35 million. On sales of $1.50 million, its GAAP income statement showed a gross profit of $227,500, direct materials cost of $520,000, and direct labor costs of $635,000. The contribution margin was $165,000, and variable manufacturing overhead was $50,000. (a) Calculate the following: 1. Your answer is correct. 2. Variable selling and administrative expenses. Fixed manufacturing overhead. 3. Fixed selling and administrative expenses. $ Maximum increased advertising expenditure $ $ 130000 67500 81000 Ignoring your answer to above part, assume that fixed manufacturing overhead was $100,000 and the fixed selling and administrative expenses were $84,000. The marketing vice president feels that if the company increased its advertising, sales could be…Sheridan Industries carries no inventories. Its product is manufactured only when a customer's order is received. It is then shipped immediately after it is made. For its fiscal year ended October 31, 2025, Sheridan's break-even point was $1.34 million. On sales of $1.50 million, its GAAP income statement showed a gross profit of $227,500, direct materials cost of $530,000, and direct labor costs of $625,000. The contribution margin was $165.000, and variable manufacturing overhead was $52,000. Calculate the following: 1. 2. Your answer is incorrect. 3. Variable selling and administrative expenses. Fixed manufacturing overhead. Fixed selling and administrative expenses. $ BA GA $ $ Ignoring your answer to above part, assume that fixed manufacturing overhead was $100,000 and the fixed selling and administrative expenses were $79,000. The marketing vice president feels that if the company increased its advertising, sales could be increased by 20%. What is the maximum increased…
- Pharoah Industries carries no inventories. Its product is manufactured only when a customer's order is received. It is then shipped immediately after it is made. For its fiscal year ended October 31, 2020, Pharoah's break-even point was $1.38 million. On sales of $119 million, its income statement showed a gross profit of $178,800, direct materials cost of $405.000, and direct labor costs of $503,000. The contribution margin was $142,800, and variable manufacturing overhead was $51,000. (a) Your Answer Correct Answer (Used) - Your answer is partially correct. Calculate the following: 1. Variable selling and administrative expenses. 88200 2. Fixed manufacturing overhead. 24 165600 3. Fixed selling and administrative expenses. 113400 eTextbook and Media Solution Attempts: 3 of 3 used (b) Your answer is incorrect. Ignore your answer to above part, assume that fixed manufacturing overhead was $100,000 and the fixed selling and administrative expenses were $82,000. The marketing vice…Kelly Inc. is involved in litigation regarding a faulty product sold in a prior year. The company has consulted with its attorney and determined that it is possible that they may lose the case. The attorneys estimated that there is a 40% chance of losing. If this is the case, their attorney estimated that the amount of any payment would be P 500,000. What is the required journal entry as a result of this litigation? *a. Debit Litigation Expense for P 500,000 and credit Litigation liability for P 500,000b. No journal entry is requiredc. Debit Litigation Expense for P 200,000 and credit Litigation Liability for P 200,000d. Debit Litigation Expense for P 300,000 and credit Litigation Liability for P 300,000Sound Audio manufactures and sells audio equipment for automobiles. Engineers notified management in December 2016 of a circuit flaw in an amplifier that poses a potential fire hazard. An intense investigation indicated that a product recall is virtually certain, estimated to cost the company $2 million. The fiscal year ends on December 31. Required: 1. Should this loss contingency be accrued, only disclosed, or neither? Explain. 2. What loss, if any, should Sound Audio report in its 2016 income statement? 3. What liability, if any, should Sound Audio report in its 2016 balance sheet? 4. Prepare any journal entry needed.
- Waterway Shoes Foot Inc. is involved in litigation regarding a faulty product sold in a prior year. The company has consulted with its attorney and determined that it is possible that they may lose the case. The attorneys estimated that there is a 45% chance of losing. If this is the case, their attorney estimated that the amount of any payment would be $815000. What is the required journal entry as a result of this litigation? Debit Litigation Expense for $366750 and credit Litigation Liability for $366750. Debit Litigation Expense for $448250 and credit Litigation Liability for $448250. No journal entry is required. Debit Litigation Expense for $815000 and credit Litigation liability for $815000.On October 5, 2023, Diamond in the Bramble Recruiting Group Inc's board of directors decided to dispose of the Blue Division. A formal plan was approved. Diamond derives approximately 70% of its income from its human resources management practice. The Blue Division gets contracts to perform human resources management on an outsourced basis. The board decided to dispose of the division because of unfavourable operating results. Net income for Diamond was $89,320 for the fiscal year ended December 31, 2023 (after a charge for tax at 30% and after a writedown for the Blue assets). Income from operations of the Blue Division accounted for $3,920 (after tax) of this amount. Because of the unfavourable results and the extreme competition, the board believes that it cannot sell the business intact. Its final decision is to auction off the office equipment. The equipment is the division's only asset and has a carrying value of $24,000 at October 5, 2023. The board believes that proceeds from…A company has an inventory of 1,000 assorted parts for a tool that has been discontinued. The inventory cost is $78,000. The parts can be either (a) remachined at total additional costs of $24,500 and thensold for $33,000 or (b) sold as scrap for $6,500. Based only on quantitative data, which action should be taken? Remachine since the difference in favor of remachining is $2000 b. Remachine since the difference in favor of remachining is $8500 c. Sell as scrap since the difference in favor of selling is $6500 d. Sell as scrap since the difference in favor of selling is $2000 Clear my choice