The management of Wengel Corporation is considering dropping product B90D. Data from the company's accounting system appear below: Sales Variable expenses $883, 200 $417,300 $273,000 $233,000 Fixed manufacturing expenses Fixed selling and administrative expenses 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? 2. Should B90D be dropped? Yes No
Q: Theodore Co. has been incurring losses in the past years during the third quarter of the year.…
A: SOLUTION- CONTINUED OPERATIONS REFERS ALL BUSINESS OPERATIONS EXCLUDING SEGMENTS THAT ARE…
Q: The condensed income statement for a Fletcher Inc. for the past year is as follows: Product F…
A: Calculation of profit without product G Product F G H Total Sales $300,000 $ 340,000 $640,000…
Q: The condensed income statement for a Fletcher Inc. for the past year is as follows: Product…
A: Formula: Contribution margin: Sales - variable cost. Deduction of variable cost from sales value…
Q: Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses for…
A: >Contribution margin Income Statement is Variable costing Income Statement wherein, the Costs are…
Q: The following product line information is for the Swiss Watch Company. The company is considering…
A: Note: Operating income of the company will be decreased by the amount, contribution margin earned by…
Q: ABC Company is considering eliminating its parts division as a result of its current operating…
A: The operating income of the company will increase or decrease by the elimination of its division as…
Q: net operating income
A: Net operating income is the excess of operating revenues over operating expenses.
Q: The condensed income statement for a Fletcher Inc. for the past year is as follows: Product F…
A: The income statement shows the net income or net loss calculated by deducting the expenses from the…
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: NUBD Co. has been incurring losses in the past years during the third quarter of the year.…
A: SOLUTION- CONTINUED OPERATION ARE ACTIVITIES WITHIN A BUSINESS ORGANIZATION THAT ARE ONGOING AND…
Q: The management of Bonga Corporation is considering dropping product D74F. Data from the company's…
A: Calculation of Financial Advantage (Disadvantage) if Product D74 is dropped If Product D74…
Q: Frazer Corp sells several products. Information of average revenue and costs is as follows:…
A: Operating income reduced would be the difference between the current value of operating income and…
Q: If the Mandarin store is closed, what is the incremental effect on profit for Marshal Costumes?
A: Net income: Net income is the excess amount of revenue after deducting all the expenses of a…
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: Lyca Company is currently operating at a loss of P20,000. The sales manager has received a special…
A: In the given question, the company is current incurring a loss of P 20,000. The company wants its…
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: A company has three product lines, one of which reflects the following results: Sales…
A: Avoidable fixed expenses = Total fixed expenses x 60% = $130,000 x 60% = $78,000
Q: The accounting firm of JN Corporation has been studying the sales requirements of the Shayan…
A: Break even point means a point where firm is neither earning profit nor incurring any loss. For…
Q: The condensed income statement for Monroe Corp. for the past year is as follows: Product В C Sales…
A: If product B is discontinued then Total Fixed costs will be allocated to product "C" Because Fixed…
Q: Sage Company is operating at 90% of capacity and is currently purchasing a part used in its…
A: Formula: Differential cost = ( Current purchasing price - Cost excluding fixed cost ) x Units…
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: 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 condensed income statement for a Hayden corp. For the past year…
A: Formula: Change in net income = Sales made by T - Variable cost of T
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: A company operates with two departments: Department AA and Department BB. The manager is considering…
A:
Q: The condensed income statement for a business for the past year is as follows:…
A: When a business decision to be made on discontinuance then have to consider the impact of…
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: A guitar manufacturer is considering eliminating its electric guitar division because its $90,790…
A: To make a decision whether the guitar division should be eliminated or not, unavoidable expenses…
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: Bovine Company, a wholesale distributor of umbrellas, has been experiencing losses for some time, as…
A: 1. Working Notes:1The total traceable fixed expenses for each region =$1,107,000 where as the…
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: A guitar manufacturer is considering eliminating its electric guitar division because its $76,000…
A: Introduction: Revenue is calculated by multiplying this same average sales price even by the number…
Q: Sage Company is operating at 90% of capacity and is currently purchasir a part used in its…
A: Differential costs is the difference between costs of two alternatives. Costs and revenues should be…
Q: Bovine Company, a wholesale distributor of umbrellas, has been experiencing losses for some time, as…
A: Traceable fixed costs are costs which the company is able to allocate to department or segment.…
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: 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: Your Retail Store's accountant prepared the following income statement for the ladies' accessories…
A: Net operating income refers to the income or loss earned by the operating activities. It is…
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: The income statement for Slumber Company is divided by its two product lines, blankets and pillows,…
A: We will need to calculate the if we discontinue to produce product "Pillow" then how much it will…
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: 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…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- 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 $ 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 ItemsThe 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? Multiple Choice $189,500 ($69,500)The 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 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 $932,000 $410,000 $346,000 $253,000 All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $212,000 of the fixed manufacturing expenses and $123,000 of the fixed selling and administrative expenses are avoidable if product D74F is discontinued. What would be the financial advantage (disadvantage) from dropping product D740The 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) $521,000Wingate 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…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 NoYour Company is considering discontinuing a product. Data from the company's accounting system appear below: Sales $240,000 Variable costs $101,000 Fixed manufacturing costs $ 94,000 Fixed selling & administrative costs $ 55,000 $41,000 of the fixed manufacturing expenses and $25,000 of the fixed selling and administrative expenses cannot be avoided if the product is discontinued. What would be the effect on the company's overall net operating income if the product were dropped?
- 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 as shown by its most recent monthly contribution format Income statement: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ 1,601,000 530,090 1,070,910 1,178,000 $ (107,090) In an effort to resolve the problem, the company wants to prepare an Income statement segmented by division. Accordingly, the Accounting Department provided the following Information: Sales Variable expenses as a percentage of sales Traceable fixed expenses East $ 401,000 49% $ 293,000 Required 1 Complete this question by entering your answers in the tabs below. Required 1 Required 2A Required 2B Prepare a contribution format income statement segmented by divisions. Required: 1. Prepare a contribution format Income statement segmented by divisions. 2-a. The Marketing Department belleves increasing the West Division's monthly advertising by $30,000 will increase that division's sales…Wingate Company, a wholesale distributor of electronic equipment, has been experiencing losses as shown by its most recent monthly contribution format income statement: Sales Variable expenses Contribution margin Fixed expenses Net operating income (loss) $ 1,551,000 618,590 932,410 1,026,000 $ (93,590) In an effort to resolve the problem, the company wants to prepare an income statement segmented by division. Accordingly, the Accounting Department provided the following information: Sales Variable expenses as a percentage of sales Traceable fixed expenses East $ 381,000 49% $ 259,000 Division Central $ 610,000 35% $ 324,000 West $ 560,000 39% $ 195,000 Required: 1. Prepare a contribution format income statement segmented by divisions. 2-a. The Marketing Department believes increasing the West Division's monthly advertising by $29,000 will increase that division's sales by 14%. Assuming these estimates are accurate, how much would the company's net operating income increase (decrease)…