both are subparts of a question answer both without handwritten thanks A study has been conducted to determine if Product A should be dropped. Sales of the product total $200,000 per year; variable expenses total$140,000 per year. Fixed expenses charged to the product total $90,000 per year. The company estimates that $40,000 of these fixed expenses willcontinue even if the product is dropped. These data indicate that if Product A is dropped, the company's overall net operating income would:Select one:O aO b.Oc.decrease by $20,000 a yeardecrease by $10,000 a yearincrease by $20,000 a yearincrease by $10,000 a yearO d.O e. none of the abovethe net present value of a project is zero, then:Select one:O a. the project is not acceptableO b. the project is earning the minimum required rate of returnOc. the project will break-evenOd. the project will lose moneye. none of these is correct

Particulars Amount Savings in cost a Savings in variable cost 140000 b Savings in Fixed…

Answered: A study has been conducted to determine…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A study has been conducted to determine if Product A should be dropped. Sales of the product total $500,000; variable expenses total $340,000. Fixed expenses charged to the product total $210,000. The company estimates that $60,000 of these fixed expenses are not avoidable even if the product is dropped. If Product A is dropped, the annual financial advantage (disadvantage) for the company of eliminating this product should be: Multiple Choice ($10,000) $10,000 ($50,000) $50,000 Next
A study has been conducted to determine if Product A should be dropped. Sales of the product total $500,000; variable expenses total $340,000. Fixed expenses charged to the product total $210,000. The company estimates that $60,000 of these fixed expenses are not avoidable even if the product is dropped. If Product A is dropped, the annual financial advantage (disadvantage) for the company of eliminating this product should be: Multiple Choice ($10,000) $50,000 ($50,000) $10,000
A study has been conducted to determine if one of the departments in Your Company should be discontinued. The contribution margin in the department is $50,000 per year. Fixed expenses charged to the department are $65,000 per year. It is estimated that $40,000 of these fixed expenses could be eliminated if the department is discontinued. If the department is discontinued, what would be the annual change in the company's overall net operating? It the change is a decrease, enter your number with a – in front. Otherwise, just enter the number. ENTER YOUR ANSWER WITHOUT DOLLAR SIGNS OR OTHER DISCRIPTIONS.
Zeal Corporation is thinking about the dropping of its product Z.Sales of the product total Rs.400,000 per year; variable expensestotal Rs. 270,000 per year. Fixed expenses charged to the producttotal Rs. 150,000 per year. The company estimates that Rs.70,000 of these fixed expenses are not avoidable even if theproduct is dropped. If Product Z is dropped, what will be the netincrease or decrease in profit of the company?
A study has been conducted to determine if one of the departments in Carry Corporation should be discontinued. The contribution margin in the department is $80,000 per year. Fixed expenses charged to the department are $95,000 per year. It is estimated that $50,000 of these fixed expenses could be eliminated if the department is discontinued. These data indicate that if the department is discontinued, the yearly financial advantage (disadvantage) for the company would be: Multiple Choice O ($30,000) ($15,000) $15,000 $30,000
A study has been conducted to determine if one of the departments in Parry Company should be discontinued. The contribution margin in the department is $40,000 per year. Fixed expenses charged to the department are $65,000 per year. It is estimated that $30,000 of these fixed expenses could be eliminated if the department is discontinued. These data indicate that if the department is discontinued, the company's overall net operating income would: Oa. decrease by $15,000 per year. Ob. decrease by $10,000 per year. c. increase by $10,000 per year. Od. increase by $15,000 per year.
Company is thinking about the dropping of its product Z. Sales of the product total Rs.400,000 per year; variable expenses total Rs. 270,000 per year. Fixed expenses charged to the product total Rs. 150,000 per year. The company estimates that Rs. 70,000 of these fixed expenses are not avoidable even if the product is dropped. If Product Z is dropped, what will be the net increase or decrease in the profit of the company?
Assume a company is considering adding a new product. The expected cost and revenue data for this product are as follows: Annual sales 5,000 units Unit selling price $ 60 Unit variable costs: Production $ 33 Selling $ 6 Incremental fixed costs per year: Production $ 34,500 Selling $ 45,000 If the company adds the new product, it expects the contribution margin of other product lines to drop by $15,300 per year. What is the financial advantage (disadvantage) of adding the new product? Multiple Choice $40,800 $10,200 $89,700 $25,500
Key Corporation is considering the addition of a new product. The expected cost and revenue data for the new product are as follows: Annual sales Selling price per unit. Variable costs per unit: Production Selling Avoidable fixed costs per year: Production Selling Multiple Choice $325,000 Allocated common fixed corporate costs per year If the new product is added, the combined contribution margin of the other, existing products is expected to drop $65,000 per year. Total common fixed corporate costs would be unaffected by the decision of whether to add the new product. If the new product is added next year, the financial advantage (disadvantage) resulting from this decision would be: O $200,000 $145,000 2,500 units $304 $135,000 $125 $49 $ 50,000 $ 75,000 $ 55,000
Last year Minden Company introduced a new product and sold 15,000 units at a price of $74 per unit. The product's variable expenses are S44 per unit and its fixed expenses are $521,400 per year. Required: What was this product's net operating income (loss) last year? What is the product's break-even point in unit sales and dollar sales? Assume the company conducted a marketing study that estimates it can increase annual sales of this product by 5,000 units for each $2 reduction in its selling price. If the company will only consider price reductions in increments of $2 (e.g., S72, S70, etc.), what is the maximum annual profit it can earn on this product? What sales volume and selling price per unit generate the maximum profit? What would be the break-even point in unit sales and dollar sales using the selling price you calculated in requirement 37
Solano Company has sales of $520,000, cost of goods sold of $380,000, other operating expenses of $51,000, average invested assets of $1,650,000, and a hurdle rate of 8 percent. Several possible changes that Solano could face in the upcoming year follow. Determine each scenario’s impact on Solano’s ROI and residual income. (Note: Treat each scenario independently.)a. Company sales and cost of goods sold increase by 40 percent. What is the residual income? Thanks
Last year Minden Company introduced a new product and sold 25,100 units of it at a price of $100 per unit. The product's variable expenses are $70 per unit and its fixed expenses are $830,700 per year. Required: 1. What was this product's net operating income (loss) last year? 2. What is the product's break-even point in unit sales and dollar sales? 3. Assume the company has conducted a marketing study that estimates it can increase annual sales of this product by 5,000 units for each $2 reduction in its selling price. If the company will only consider price reductions in increments of $2 (e.g., $68, $66, etc.), what is the maximum annual profit that it can earn on this product? What sales volume and selling price per unit generate the maximum profit? 4. What would be the break-even point in unit sales and in dollar sales using the selling price that you determined in requirement 3? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3…

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